High Court of KeralaSingle Judge2016-08-08Petition dismissed

Jose P.P. v. State Bank of Travancore & State of Kerala

Case / Petition Number:OP(Crl.) No. 442 of 2016

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: RAJA VIJAYARAGHAVAN V.
Judgment Date: 2016-08-08
Court Decision / Holding: Petition dismissed. The High Court refused to entertain the Article 227 challenge, noting availability of expeditious and effective remedies under SARFAESI (Section 17(1)) and holding that there is no sufficient error or injustice in the orders of the CJM Kasaragod. The court also observed the doctrine of constructive res judicata due to a prior writ petition decision and emphasized that the matter should proceed through statutory channels rather than constitutional challenge.
Final Disposition: Petition dismissed

Parties to the Case

Appellants / Petitioners

Jose P.P., S/o Late Paily

Respondents

State Bank of Travancore, Hosdurg (Kanhangad) Branch, represented by its Authorized Officer E. Thamban Nair
State of Kerala, represented by Public Prosecutor, High Court of Kerala

Legal Representation & Advocates

Counsels for Petitioners

• Smt. P.T. Jose, Adv.

Counsels for Respondents

• Smt. Pushpalatha, Govt. Pleader (R2)
• S. Jayesh Mohan Kumar, SC (R1)

Case Synopsis & Summary

This is a Kerala High Court single-judge petition under Article 227 challenging orders issued in a SARFAESI 14 proceedings. The borrower (applicant) contends that the notices/order under Sections 14 to take possession were improper because the required affidavit under Section 14(1)(b) and its proviso, as well as the accompanying Rule 2(a) disclosure by the secured creditor, were not satisfied. The petition relies on Exts P2 and P4 (CJM Kasaragod orders) and argues that CMP 1798/2015 is not maintainable for want of compliance with statutory prerequisites, citing Ext P1 affidavit as non-compliant. It also relies on a prior judgment (Ext P9 in a writ petition) directing an installment remittance and seeks to stay further proceedings and grant time to pay the balance. The respondent bank, aided by government counsel, contends that SARFAESI remedies are expeditious and that a remedy under Section 17(1) of the Act is available; the court cites the principle that the remedy under Section 17(1) should be pursued and that Article 227 should be sparingly used. The court ultimately finds no error in the subordinate court’s decision, cites the need to seek relief under the Act rather than constitutional review, and dismisses the petition.

Provisions of Law Cited

SARFAESI Act, 2002 - Section 14(1)(b)(i)-(ix) provisoSARFAESI Act, 2002 - Section 14SARFAESI Act, 2002 - Section 13(4)SARFAESI Act, 2002 - Section 17(1)SARFAESI Act, 2002 - Section 18Rule 2(a) of the Security Interest (Enforcement) RulesArticle 227 of the Constitution

Legal Doctrines & Maxims

Constructive res judicata
Broad interpretation of 'any person' under Section 17(1) (breadth of remedy)
Jurisdiction under Article 227 should be sparingly used in cases of patent error or gross injustice (Jasbir Singh v. State of Punjab)
Remedies under SARFAESI Act are expeditious and effective, particularly under Section 17(1)
Availability of alternate remedy under Section 17(1) before a Tribunal/ Appellate Tribunal (as clarified in United Bank of India v. Satyawati Tondon)

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends that the SARFAESI application under Section 14 was not properly maintained, as Ext P2 and Ext P4 were issued without the mandatory affidavit by the secured creditor’s authorised officer and without compliance with the proviso to Section 14(1)(b) and Rule 2(a) of the Security Interest (Enforcement) Rules. The Ext P1 affidavit allegedly fails to meet statutory mandates; the order under challenge should be set aside. The petitioner also urges that the earlier writ judgment (Ext P9) directing instalment remittance should govern, and seeks time to pay the balance while challenging the sale action.” ,

Contentions of Respondents

The respondents maintain that the SARFAESI proceedings were properly instituted under Section 14, with due process and in accordance with statutory prerequisites. They emphasize that Ext P2/P4 were issued in line with the Act and that remedies under Section 17(1) are available but that the petitioner has sought relief under Article 227, which should be avoided where effective statutory remedies exist. They rely on existing jurisprudence that emphasizes expediency and the proper use of SARFAESI remedies to protect secured creditors’ interests.

Cited Precedents (2)

Case Name	Citation	Treatment	Explanation
United Bank of India v. Satyawati Tondon and others	AIR 2010 SC 3413	Positive	Apex Court held that remedies under Section 17(1) of SARFAESI Act are available and should be pursued by aggrieved parties; SARFAESI remedies are expeditious and effective.
Jasbir Singh v. State of Punjab	2006 (8) SCC 294	Positive	Principle that Article 227 should be sparingly used; only for patent errors or gross injustice in subordinate Courts.

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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 RAJA VIJAYARAGHAVAN V** **MONDAY, THE 8TH DAY OF AUGUST 2016/17TH SRAVANA, 1938** ## **OP(Crl.).No. 442 of 2016 ()** **---------------------------CMP.NO. 1798/2015 OF CHIEF JUDICIAL MAGISTRATE COURT, KASARAGOD** **-------------------------------** ## **PETITIONER/BORROWER:** **----------------------------------------** **JOSE P.P., S/O.LATE PAILY, PACHAPPATHIKKAL HOUSE, MUKKUZHY, THAYANNUR P.O., KASARAGOD DISTRICT - 671531.** **BY ADV. SRI.P.T.JOSE** ## **RESPONDENT(S)/SECURED CREDITOR :** **------------------------------------------------------------** **1. STATE BANK OF TRAVANCORE, HOSDURG (KANHANGAD) BRANCH, REP. BY ITS AUTHORISED OFFICER, SHRI E.THAMBAN NAIR, S/O.K.KRISHNAN NAIR, AGED 57 YEARS, CHIEF MANAGER, STATE BANK OF TRAVANCORE, HOSDURG (KANHANGAD), (REPRESENTED BY SRI.K.MOHAMMED SHAFI, ADVOCATE, KASARAGOD). PIN-671 531** **2. STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. PIN-682 031** **R1 BY SRI. JAYESH MOHAN KUMAR, SC, R2 BY GOVERNMENT PLEADER SMT. PUSHPALATHA** **THIS OP (CRIMINAL) HAVING COME UP FOR ADMISSION ON 08-08-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **sts** ## **OP(Crl.).No. 442 of 2016 ()** ## **---------------------------------------** ## **APPENDIX** **PETITIONER(S)' EXHIBITS ----------------------------------------EXHIBIT-P1: TRUE COPY OF AFFIDAVIT FILED BY THE AUTHORIZED OFFICER DATED 14/4/2015 IN CMP 1798/15. EXHIBIT-P2: TRUE COPY OF THE ORDER DATED 15/09/15 BY CJM COURT, KASARAGOD. EXHIBIT-P3: TRUE COPY OF THE CMP 712/2016 IN CMP 1798/15 FILED BEFORE THE CJM COURT, KASARAGOD. EXHIBIT-P4: TRUE COPY OF THE ORDER DATED 1/07/16 BY CJM COURT, KASARAGOD. EXHIBIT-P5: TRUE COPY SALE DEED 543/96 OF SRO RAJAPURAM. EXHIBIT-P6: TRUE COPY OF THE ORDER DATED 4/12/2012 THE PRIVATE SECRETARY, OFFICER OF THE MINISTER FOR REVENUE, THIRUVANANTHAPURAM. EXHIBIT-P7: TRUE COPY OF THE ORDER DATED 16/1/2013 BEARING NO.78798/H2/12/RD. EXHIBIT-P8: TRUE COPY REMITTANCE PARTICULARS ISSUED BY BELUR VILLAGE. EXHIBIT-P9: TRUE COPY OF THE JUDGMENT DTD. 25/11/2015 IN WP ©.NO.35256/15 BEFORE THE HON'BLE HIGH COURT. RESPONDENT(S)' EXHIBITS: NIL ------------------------------------------** **/TRUE COPY/** **P.A.TO JUDGE** **sts** ## **RAJA VIJAYARAGHAVAN.V., J** - - - - - - - - - - - - - - - - - - - - O.P.(Crl.). No. 442 of 2016 - - - - - - - - - - - - - - - - Dated 8[th] August, 2016 - - - - - - - - - - - - - - - - - - - - - - - - ## **JUDGMENT** 1.This petition is filed under Article 227 of the Constitution of India seeking the following reliefs: “i. To call for the records leading to Exts. P2 and P4 orders and set aside Ext.P2 and P4 order of CJM Court, Kasargod. ii. To declare that the CMP 1798 of 2015 is not maintainable in the light of Ext.P1 affidavit filed along said application by finding that Ext.P1 is not complying the statutory mandates of Sec 14(1)(b)(i) to (ix) of SARFAESI Act. iii. To direct that Advocate Commissioner to stop all further proceedings in pursuance to Ext.P2 and P4 orders passed by the CJM Court, Kasargoad. O.P.(Crl.) No. 442 of 2016 -2- iv. To grant sufficient time to the petitioner for pay the actual balance amount due to the 1[st] respondent bank.” 2.The petitioner had availed a loan of Rs.3,60,000/from the 1[st] respondent Bank creating security interest over an item of property. On his failure to repay the amount, proceedings were initiated under the Secularization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ( hereinafter referred to as the “SARFAESI Act ”). - 3.When revenue recovery proceedings were initiated, the petitioner had secured an order from the Office of the Minister for Revenue to remit the amount in 50 installments. Later when the Bank initiated the proceedings under the SARFAESI Act ignoring the above order, the petitioner approached this Court and invited Exhibit P 9 judgment by which he was directed O.P.(Crl.) No. 442 of 2016 -3to remit the balance amount in 12 equal and successive monthly installments commencing from 15.12.2015. 4.Thereafter the respondent No 1 filed a petition under Section 14 of the SARFAESI Act and Exhibit P 2 order was passed appointing a commissioner Advocate to take possession of the secured assets. According to the learned Counsel, the application by the secured creditor is to be accompanied by an affidavit duly affirmed by the authorized officer of the secured creditor and it should contain a declaration of all details as contemplated under the proviso to Section 14 1 (b). The affidavit filed by the 1[st] respondent will not satisfy the mandate under the Act is the submission. It is also submitted that Ext.P1 affidavit has not been filed by the authorized officer appointed under Rule 2(a) of the Security Interest ( Enforcement) Rules and on that count also the O.P.(Crl.) No. 442 of 2016 -4application was liable to be dismissed. Stating these aspects Exhibit P 3 application was filed before the learned Magistrate but the same was dismissed by Exhibit P 4 order. Exhibit P 2 and P 4 orders are under challenge in this petition filed under Article 227 of the Constitution of India. - 5.I have heard the learned counsel appearing for the petitioner and the respondent No 1. 6. Exhibit P9 is the judgment in W.P.(C) No.35256 of 2015 and it is obvious that the petitioner had produced Exhibit P2 as well before this Court while securing the judgment. This fact is evident from the exhibits produced by the petitioner herein in the earlier Writ petition. After considering the submissions this Court had granted time to the petitioner to remit the balance amount in installments. The plea presently raised will therefore be barred by constructive res judicata. - 7.Further in the matter of **United Bank of India v.** O.P.(Crl.) No. 442 of 2016 -5- **Satyawati Tondon and others** (AIR 2010 SC 3413) the Apex Court has held that if the parties have any tangible grievance against the notice issued under S.13(4) or action taken under S.14, then they could have availed remedy by filing an application under S.17(1). The expression 'any person' used in S.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 S.13(4) or S.14. Both, the Tribunal and the Appellate Tribunal are empowered to pass interim orders under S.17 and S.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. In view of the law laid down by the Hon'ble Supreme Court and in view of the availability of the alternative remedy of filing an application before the tribunal O.P.(Crl.) No. 442 of 2016 -6under S.17(1) of the SARFAESI Act, this court is not inclined to entertain this petition filed under Art.227 of the Constitution of India. - 8.Even otherwise, the judicial Superintendence under Article 227 of the Constitution has to be exercised sparingly when there is patent error or gross injustice in the view taken by a subordinate Court ( See J **asbir Singh VState of Punjab** 2006 (8) SCC 294 ). Despite the persuasive arguments of the learned Counsel, I am not able to find any error or injustice in the view taken by the Court below. I do not find any merit in this petition and the same will stand dismissed. Sd/- **RAJA VIJAYARAGHAVAN.V., JUDGE** kp/-10.8.16