K. N. UNNIKRISHNA PILLAI v. The Manager, HDFC Ltd., Mavelikkara Branch and 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 TUESDAY, THE 23RD DAY OF FEBRUARY 2021 / 4TH PHALGUNA, 1942 ## WA.No.383 OF 2021 AGAINST THE JUDGMENT DATED 19.02.2021 IN WP(C) 4406/2021(A) OF HIGH COURT OF KERALA ## APPELLANT/PETITIONER: K. N. UNNIKRISHNA PILLAI, S/O. NEELAKANTA KURUP, PRANAVAM HOSUE, MULAPUZHA, PANDALAM P.O., PATHANAMTHITTA, PIN-689 501 REPRESENTED BY HIS POWER OF ATTORNEY HOLDER GOPAKUMAR B.NAIR, AGED 57 YEARS, S/O. LATE N.BALAKRISHNAN NAIR, 5A, SKYLINE PLAZA APARTMENTS, VELLAYAMBALAM P.O., THIRUVANANTHAPURAM, PIN-695 010. BY ADVS. SRI.C.S.MANU SRI.T.B.SIVAPRASAD SRI.C.A.ANUPAMAN SRI.C.Y.VIJAY KUMAR SMT.MANJU E.R. SHRI.ANANDHU SATHEESH RESPONDENTS/RESPONDENTS: 1 THE MANAGER HDFC LTD., MAVELIKKARA BRANCH, ALAPPUZHA DISTRICT, PIN-690 101. 2 THE AUTHORISED OFFICER, HDFC LTD., HDFC HOUSE, P.B.NO.2288, VAZHUTHACAUD, THIRUVANANTHAPURAM, PIN-695 010. ## SMT S AMBILY THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 23.02.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.A. No. 383/2021 : 2: ## **Dated this the 23[rd] day of February, 2021. JUDGMENT** ## **S. MANIKUMAR,CJ.** Being aggrieved by the judgment dated 19.02.2021 in W.P.(C) No. 4406 of 2021, instant writ appeal is filed. 2. Facts leading to the writ petition are as follows: The appellant/writ petitioner has availed two loans from the respondent Bank for Rs. 50,00,000/- and Rs.3,30,408/- as loan account Nos. 630119786 and 630784162 respectively. Due to default in making payments, respondent Bank initiated proceedings under the SARFAESI Act. Thereafter, he submitted a representation expressing his readiness to pay off the outstanding amount in 12 equal monthly instalments and to continue to pay the future EMI regularly. However, the writ petitioner was not issued with any notice under Section 13(2) of the SARFAESI Act, 2002. But, later, he came to know about the application preferred by the Authorized Officer of the Bank only when he received copy of order dated 18.11.2019 passed by the learned Chief Judicial Magistrate, Thiruvananthapuram through Whats app message sent by the Bank to the appellant/writ petitioner, on 29.11.2019. 3. Aggrieved by the proceedings initiated by the respondents under the SARFESI Act, 2002, he has filed W.P.(C) No. 34584 of 2020 W.A. No. 383/2021 : 3: before this Court. Writ Court, as per Ext. P5 judgment, directed him to pay the outstanding amount in instalments for regularising the loan account. But, the petitioner could not comply with the directions in the judgment on account of the pandemic situation which arose due to pandemic Covid-19. 4. According to the appellant, despite Exts.P6 to P11 orders of a Full Bench of this Court staying the coercive proceedings for recovery of debts by the Banks and other financial institutions, Ext.P12 order was issued by the Advocate Commissioner informing the appellant that the Commissioner will be reaching the spot for the execution of the order of the learned Chief Judicial Magistrate on 25.02.2021. Thereafter, the appellant submitted Ext.P13 representation dated 28.10.2020 through his power of attorney holder. Aggrieved by Ext.P12 notice, W.P.(C) No. 4406 of 2021 has been filed seeking the following reliefs: 1. Issue a writ of certiorari or any other appropriate writ, order or direction calling for the records leading to Ext. P12 notice issued by the Advocate Commissioner and quash Ext. P12. 2. Issue a writ of mandamus or any other appropriate writ, order or direction restraining the respondents from taking any coercive proceedings against the petitioner in respect of loan account Nos. 630119786 and 630784162 covered by Exts. P3 and P4. 3. Issue a writ of mandamus or any other appropriate writ or order directing W.A. No. 383/2021 : 4: the respondents to consider Ext. P13 representation to re-structure and regularize the loan as per law and prevailing banking regulations applicable to HDFC Limited with a lenient view. 5. Writ court, after hearing the learned counsel on both sides, held as follows: “4. I have considered the submissions so advanced and perused the materials placed before me. In fact the fate of the petitioner is sealed by the judgment of this Court in W.P.(C) No.34584 of 2019. This Court, in the case of the petitioner, has categorically held that in case the directions given by the Court in favour of the petitioner for regularising his loan account are not complied by the petitioner, then the petitioner will have to give up all his contentions that were otherwise available to him, to be raised in appropriate proceedings before competent forum. Undisputedly, the petitioner has not complained the earlier judgment passed by this Court which was in fact in his favour. Subsequently also there was no attempt on the part of the petitioner to regularise his loan account except representation at Ext.P13 and few payments made in the light of that representation. The total arrears reported by the learned Standing Counsel appearing for respondents as on date is Rs.19,74,088/-. That is how respondents have proceeded under the SARFAESI Act and issued notice for recalling the loan. This has culminated into appointment of a Court Commissioner by the learned Chief Judicial Magistrate as per the provisions of Section 14 of the SARFAESI Act for taking possession of the secured asset.” 6. Order dated 18.11.2019 passed by the learned Chief Judicial W.A. No. 383/2021 : 5: Magistrate, Thiruvananthapuram in M.C.No. 127 of 2019 dated 18.11.2019 reads thus: ## **ORDER** This petition has been filed u/s 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘Act’) for taking possession of the secured asset which is the scheduled property. 2. The petitioner is the HDFC Ltd., who is the secured creditor and respondent is the borrower who are the secured debtor. The respondent has created a security interest in respect of the scheduled property which is the secured asset top favour of the petitioner in respect of cash credit facility by way of a loan availed from the petitioner by the respondents as per a security agreement. The respondent has defaulted in making payment in time. So, the petitioner has issued notice under u/s. 13(2) of the Act to the respondents. But even after receiving the statutory notice u/s 13(2) of the Act, he had defaulted in repaying the loan amount within the statutory period. So the petitioner has sought for taking possession of the secured asset for regularization of the amount due to the petitioner’s bank. 3. The petitioner has filed an affidavit as contemplated under the proviso to Sec. 14(1) of the Act stating inter alia that the secured asset. It is not in possession of a lessee under a valid lease made prior to the creator of the mortgage by the borrowed of made in accordance with Section 65A of TP Act prior to the receipt of a notice under Section 13(2) of the Act by the borrower. It is stated that the secured asset sought to be taken possession of do not fail to that the purview of operation of Section 31 of the Act. It is also stated that the respondent has not filed any application on appear against the petitioner challenging the proceedings initiated under SARFAESI Act. So, according the petitioner as the respondent failed to repay the amount due to the petitioner even after receiving notice u/s 13(2) of the Act, the petitioner is entitled to get possession of the secured asset. 4. The affidavit filed in support of the petition by the petitioner and documents produced therewith would show that the respondent has created security interest in respect of the secured asset in favour of the petitioner at the time of availing loan from the petitioner’s bank and he has failed in repaying the amount even after receipt of statutory notice u/s 13(2) of the Act and hence find that the petitioner is entitled for possession of the secured asset which is the scheduled property through the proceedings of this Court. 5. In the result, the petition is allowed. Advocate Nisha S. is appointed as Commissioner to take possession of the scheduled property with the date notice and hand it over to the petitioner on W.A. No. 383/2021 : 6: proper acknowledgment. The petitioner shall pay batta of Rs.4000/- to the Commissioner within 15 days from today and to pay Rs.1000/- as batta on filing commission report. The petitioner shall provide a copy of the petition including the scheduled secured asset to the advocate commissioner for executing the order. The Commissioner is directed to take possession of the scheduled property of the and to hand it over to the petitioner. If the respondent or anybody under him taken any assistance or obstruction to the execution of the order of the court the Commissioner can seek assistance of the police having jurisdiction over the area by producing the Commission warrant issued from this court before the police. If the building which is to be taken possession of is kept locked, the Commissioner is entitled to break open the same for the purpose of taking possession. The Commissioner is further directed to prepare inventory in triplicate to be attested by two respectable witnesses as records the execu of this order and in taking possession of the scheduled property and copies thereof shall be given to the petitioner as well as the respondents on proper acknowledgment. The remaining one copy shall be filed along with the commissioner’s report before the court.” Order under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 can be challenged under Section 17 of the Act. Admittedly, there is no challenge to the above said order. 7. 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 W.A. No. 383/2021 : 7: 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 exparte 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 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 W.A. No. 383/2021 : 8: 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) 8. 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 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. 9. 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 impugned judgment. 10. What is challenged in the writ petition is only the learned Advocate Commissioner's letter dated 09.02.2021 addressed to the SHO, Medical College Police Station, which reads thus: W.A. No. 383/2021 : 9: 09.02.2021 To, The SHO, Medical College Police Station. Sub: Assistance to effect delivery of property involved in MC No. 1271/2019 in the file of the Hon'ble Chief Judicial Magistrate's Court, Thiruvananthapuramreg. Ref: Order dated 18[th] November, 2019 of the Hon'ble Chief Judicial Magistrate Court. Whereas the petitioner who is the Manager/Authorised Officer, Mr. Sivakumar. S., HDFC Ltd., HDFC House, PB No. 2288, Vazhuthacaud, Thiruvananthapuram 695010 has applied before the Hon'ble Court of Chief Judicial Magistrate, Thiruvananthapuram, seeking assistance for making possession of secured assets in MC No. 1271/2019. I am authorised as Commissioner by the Chief Judicial Magistrate, Thiruvananthapuram to take possession of the land admeasuring an extent of 2.62 Ares (6.480 cents) comprised in Sy No. 1485/4-9 of Kadakampally Village, Thiruvananthapuram Taluk, Thiruvananhapuram District along with structures thereon in the aforesaid case. I will be reaching the spot for extension at 2.00 p.m on 25.02.2021, unless the matter is settled. Hence, I hereby seek sufficient police assistance for the same. Copy of the order is attached herewith. Nishi S Adovate Commissioner.” Letter addressed to the SHO, Medical College Police Station is only for police assistance. When the order made in M.C No. 127 of 2019 dated W.A. No. 383/2021 : 10: 18.11.2019 on the file of the Chief Judicial Magistrate, Thiruvananthapuram is final, there cannot be a challenge to the above said letter. We find no infirmity in the judgment warranting interference. Accordingly, this writ appeal is dismissed. sd/- **S. MANIKUMAR, CHIEF JUSTICE.** **SHAJI P. CHALY, JUDGE.** _Rv_