Kiran Babu v. Kerala Financial Corporation & Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE SATHISH NINAN** **WEDNESDAY, THE 17TH DAY OF JULY 2019 / 26TH ASHADHA, 1941** ## **RFA.(INDIGENT) No.709 of 2016** **AGAINST THE JUDGMENT IN OS 405/2010 of III ADDITIONAL SUB COURT, KOZHIKODE** **----------** ## **APPELLANT/PLAINTIFF:** **KIRAN BABU, AGED 54 YEARS, S/O APPU, BAPPAYIL HOUSE, P.O.ERANHIKKAL, ELATHUR AMSOM, PUTHUR DESOM, KOZHIKODE TALUK-673 303.** **BY ADVS. SRI.P.B.KRISHNAN SRI.P.B.SUBRAMANYAN SRI.P.M.NEELAKANDAN SRI.SABU GEORGE SRI.S.NITHIN (ANCHAL)** **RESPONDENTS/DEFENDANTS 1 TO 3 & 5 & LRs OF D4 AND SUPPLEMENTAL DEFENDANTS 6 TO 11:** - **1 KERALA FINANCIAL CORPORATION REPRESENTED BY ITS CHAIRMAN, HEAD OFFICE, VELLAYAMBALAM, THIRUVANANTHAPURAM-695 033.** - **2 KERALA FINANCIAL CORPORATION KOZHIKODE BRANCH, PALAYAM, REPRESENTED BY ITS CHIEF MANAGER, KOZHIKODE-673 001.** **3 K.T.CHANDUKUTTY, AGED 82 YEARS, S/O. CHANDU, KOLODI THEKKEYIL HOUSE,P.O.ERANHIKKAL, ELATHUR AMSOM, PUTHUR DESOM, KOZHIKODE-673 303.** - **4 T.MANI,** **AGED 45 YEARS, S/O. SREEDHARAN, THEKKAYIL HOUSE, P.O.MAKKADA, MAKKADA AMSOM, BEDIRUR DESOM, KOZHIKODE TALUK-673 611.** **RFA.(INDIGENT) No.709 of 2016 -2-** - **5 PUZHAVAKKATH THANKAM, AGED 76 YEARS, W/O. LATE SEKHARAN, PUZHAVAKKATHHOUSE,ELATHUR AMSOM, KARANNUR DESOM, KOZHIKODE DISTRICT-673 303.** - **6 PUZHAVAKKATH RAMA PRASAD, AGED 57, S/O. LATE SEKHARAN, PUZHAVAKKATH HOUSE, ELATHUR AMSOM, KARANNUR DESOM, KOZHIKODE DISTRICT-673 303.** - **7 PUZHAVAKKATH PRADEEP KUMAR, AGED 55, S/O. LATE SEKHARAN, PUZHAVAKKATH HOUSE, ELATHUR AMSOM, KARANNUR DESOM, KOZHIKODE DISTRICT-673 303.** - **8 PUZHAVAKKATH PRABHATH KUMAR, AGED 53, S/O. LATE SEKHARAN, PUZHAVAKKATH HOUSE, ELATHUR AMSOM, KARANNUR DESOM, KOZHIKODE DISTRICT-673 303.** - **9 PUZHAVAKKATH PRASIJA KUMARI, AGED 51, D/O. LATE SEKHARAN, PUZHAVAKKATH HOUSE, ELATHUR AMSOM, KARANNUR DESOM, KOZHIKODE DISTRICT-673 303.** - **10 PUZHAVAKKATH PRABIJA KUMARI AGED 46, D/O. LATE SEKHARAN, PUZHAVAKKATH HOUSE, ELATHUR AMSOM, KARANNUR DESOM, KOZHIKODE DISTRICT-673 303.** ## *** ADDL. R11 TO R14 IMPLEADED** **ADDL. R 11 JOOSIFA, AGED 52 YEARS W/O.PANTHAR KUNJU MOHAMMED, (HOME MAKER), RESIDING AT P.K.M.MANZIL, PULLIPADAM AMSOM, DESOM, P.O.MAMBADU, PULLIPADAM VILLAGE, NILAMBUR TALUK, MALAPPURAM DISTRICT - 676 542.** **ADDL. R 12 FATHIMATHU SHINY P., AGED 33 YEARS D/O.PANTHAR KUNJU MOHAMMED, RESIDING AT P.K.M.MANZIL, PULLIPADAM AMSOM, DESOM, P.O.MAMBADU, PULLIPADAM VILLAGE, NILAMBUR TALUK, MALAPPURAM DISTRICT - 676 542.** ## **RFA.(INDIGENT) No.709 of 2016 -3-** **ADDL. R 13 SHAHIM P., AGED 27 YEARS S/O.PANTHAR KUNJU MOHAMMED, BUSINESS, RESIDING AT P.K.M.MANZIL, PULLIPADAM AMSOM, DESOM, P.O.MAMBADU, PULLIPADAM VILLAGE, NILAMBUR TALUK, MALAPPURAM DISTRICT - 676 542.** **ADDL. R 14 SHARVAN P. AGED 23 YEARS S/O.PANTHAR KUNJU MOHAMMED, STUDENT, RESIDING AT P.K.M.MANZIL, PULLIPADAM AMSOM, DESOM, P.O.MAMBADU, PULLIPADAM VILLAGE, NILAMBUR TALUK, MALAPPURAM DISTRICT - 676 542.** ***[ADDITIONAL RESPONDENTS R11 TO R14 IMPLEADED VIDE ORDER DATED 22/01/2018 IN IA 2352/2017]** **BY ADVS. SMT.N.DEEPA SRI.G.HARIHARAN SRI.K.JAYESH MOHANKUMAR SRI.M.KRISHNAKUMAR SRI.M.R.VENUGOPAL SRI.T.SETHUMADHAVAN (SR.) SMT.PREETHI. P.V. SRI.M.V.BALAGOPAL SRI.PRAVEEN.H. SRI.PUSHPARAJAN KODOTH** **THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 10.07.2019, THE COURT ON 17.07.2019, DELIVERED THE FOLLOWING:** ## **SATHISH NINAN, J.** ## **= = = = = = = = = = = = = = = = = = RFA (Indigent) No.709 of 2016 = = = = = = = = = = = = = = = = = = Dated this the 17[th] day of July, 2019** ## **J U D G M E N T** Challenging the dismissal of a suit seeking to set aside a sale held under Section 29 of the Kerala State Financial Corporation Act (hereinafter referred to as “the SFC Act”), the plaintiff is in appeal. 2. The plaint scheduled property lies in three taks with a total extent of 11.902 cents equivalent to 4.82 ares with a building thereon. The land belonged jointly to the plaintiff, the fifth defendant and one Krishnan as per Ext.A1 sale deed of the year 1993. Subsequently, the three of them entered into a partnership under the name and style, “M/s Three Associates”. Ext.A4 is the Registration Certificate. 3. During the year 1995-96, for the purpose of constructing a shopping complex in the property, the firm availed financial assistance from the Kerala State Financial Corporation (hereinafter referred to as “KFC”), as is evident from Ext.A55. RFA (Indigent) No.709 of 2016 :- 2 :- Subsequently, additional facilities were availed on 18.01.1996 and 16.08.1996 as evidenced from Exts.A53 and 54 respectively, on additional security. The total credit facility availed from the KFC was `19 lakhs. 4. On failure to repay the loan amounts, possession of the property was taken over by the KFC under Section 29 of the KFC Act, as evidenced by Ext.A42 dated 15.05.2001. Thereafter, one of the partners viz. Krishnan retired from the firm as per Ext.A3 dated 23.04.2003. As per Ext.A2 assignment deed of the same date, his rights over the property was conveyed by Krishnan in favour of the plaintiff. 5. Since the debt was not paid off, KFC initiated proceedings for sale of the property. Ext.A28 which is the same as Ext.B9 sale notice dated 28.11.2005 was published by KFC on 29.11.2005. As evidenced by Ext.A23 dated 21.12.2005, the third defendant was the highest bidder. Pursuant thereto, Ext.A56 sale deed dated 23.01.2007 was executed by KFC in favour of RFA (Indigent) No.709 of 2016 :- 3 :- defendants 3 and 4. In between Ext.A23 dated 21.12.2005 and Ext.A56 dt.23.01.2007, there were a couple of writ proceedings which constituted the delay in execution of Ext.A56, the details of which shall be adverted to in the course of this judgment. 6. The suit is filed alleging that the auction sale held by the KFC on 21.12.2005 is vitiated by fraud and seeking a declaration that the auction sale and Ext.A56 sale deed are void. There is a further prayer for recovery of possession of the property on the strength of the plaintiff's title. 7. The defendants denied the allegation of fraud. They contend that the suit is barred by the law of limitation and also by res judicata. 8. All the three contentions raised in defence were upheld by the trial court and accordingly, the suit was dismissed. Aggrieved, the plaintiff is in appeal. 9. Heard Sri.P.B.Krishnan, learned counsel for the appellant and learned Senior Counsel Sri.T.Sethumadhavan and Sri.Venugopal M.R. for the RFA (Indigent) No.709 of 2016 :- 4 :- contesting respondents, and M.Krishnakumar, learned counsel for the supporting respondent. 10. Before I enter into a discussion and finding on the allegation of fraud as vitiating the sale in question, I deem it appropriate that the objections regarding the maintainability of the suit on the grounds of limitation and res judicata be dealt with. 11. The suit was filed on 23.12.09. The auction sale was held on 21.12.05 and Ext.A56 sale deed was executed on 23.01.07. The contention of the defendants is that the suit is filed beyond three years from the date of sale viz. 21.12.05 and hence barred by limitation. To the plea of limitation, the answer by the learned counsel for the appellant is two pronged. Firstly, it is contended that in terms of Section 29 of the SFC Act, it is the execution of the sale deed that constitutes the cause of action. Ext.A56 sale deed having been executed on 23.01.07, the suit is well within time. Secondly it is contended that, the plaint contains a prayer for recovery of possession on the strength of title, which is the larger relief; limitation RFA (Indigent) No.709 of 2016 :- 5 :- for the purpose of the suit has to be calculated on its basis. 12. The suit is for a declaration that the sale by KFC is void and for recovery of possession. 13. Article 58 of the Limitation Act reads thus:- ## **“** Description of suit Period of limitation Time from which period begins to run xxxxx xxxxx xxxxx 58. To obtain any Three years When the right to sue other declaration first accrues ” 14. The reliefs claimed in the suit reads thus:- “(a) Permit the plaintiff to institute the above suit as a forma pauperis, (b) Grant a decree for declaration that the sale held by the second defendant in respect of the plaint 'A' schedule property on 21.12.2005 is vitiated by fraud and that the same is ab initio void and the sale deed allegedly executed by the second defendant on 23-1-2007 as document No.1192 of 2007 in favour of the third and fourth defendants in respect of the RFA (Indigent) No.709 of 2016 :- 6 :- Plaint A schedule property is also ab initio void, invalid and incapable of conferring any right on the third defendant and that the third defendant has not derived any valid title in respect of the plaint 'A' schedule property. (c) for a consequential decree for recovery of possession of the plaint-schedule property on the strength of the title of the plaintiff and fifth defendant from the third defendant together with future mesne profits., (d) directing the defendants to pay the plaintiff the entire costs of the suit, (e) granting such other relief as may be prayed for by the plaintiff and which this Hon'ble Court deems fit to grant.” 15. Even as is evident from the reliefs claimed, it is the challenge of the plaintiff that the sale held on 21.12.05 is vitiated by fraud and is void. There is no suggestion in the relief portion or a specific plea or allegation in the body of the plaint regarding any fraud that vitiates Ext.A56 sale deed executed consequent on the confirmation of the sale held on 21.12.05. Though the learned counsel for the appellant would submit RFA (Indigent) No.709 of 2016 :- 7 :- that it is the actual execution of Ext.A56 sale deed that transfers title and constitutes the cause of action, but for the allegations of fraud against sale held on 21.12.05, there is no allegation as regards Ext.A56 sale deed. Fraud, if any, in respect of the auction held on 21.12.05, as alleged by the plaintiff, constitutes the cause of action to challenge the sale. The right to sue first accrues to the plaintiff therefrom. Learned Senior Counsel appearing for the respondents relying on the judgment of the Apex Court in Khatri Hotels Private Limited and Another v. Union of India and Another [2011 (9) SCC 127] submits that where suit is based on multiple cause of action, limitation runs from the date when the right to sue first accrues. Therein the Apex Court referring to Article 58 of the Limitation Act held thus:- “While enacting Art.58 of the 1963 Act, the legislature has designedly made a departure from the language of Art. 120 of the 1908 Act. The word 'first' has been used between the words 'sue' and 'accrued'. This would mean that if a suit is based on multiple causes of action, the period of limitation will begin to RFA (Indigent) No.709 of 2016 :- 8 :- run from the date when the right to sue first accrues. To put it differently, successive violation of the right will not give rise to fresh cause and the suit will be liable to be dismissed if it is beyond the period of limitation counted from the day when the right to sue first accrued.” 16. Here, the cause of action has first accrued on the auction sale. The plaint allegations also relate to the same. A reading of the plaint averment reveals that the challenge of the plaintiff is against the auction held on 21.12.05 and the proceedings leading thereto. It is the sale held on 21.12.05 that was confirmed. Ext.A56 sale deed was executed in pursuance of the said confirmation of the sale held on 21.12.05. The sale is held in exercise of the powers conferred under the SFC Act and does not by itself constitute a cause of action. It is not the transfer of title, but is the fraud allegedly employed in the proceedings for sale that constitute the cause of action. In view thereof, the cause of action has accrued to the plaintiff on 21.12.05. I am in agreement with the RFA (Indigent) No.709 of 2016 :- 9 :- view as expressed by the trial court. 17. To canvass the proposition that since one of the reliefs claimed in the plaint being for recovery of possession on the strength of title, the suit is governed by Article 65 of the Limitation Act and not by Article 58 which relates only to declaration, the learned counsel for the appellant relies on the recent judgment of the Apex Court dated 03.07.2019 in Sopanrao and Another v. Syed Mehmood and Ors. [Civil Appeal No.4478 of 2007]. T herein, in relation to a suit for declaration of title and recovery of possession on the strength of title the Apex Court observed that the main relief is of possession and therefore, the suit is governed by Article 65. Under what circumstance the relief of declaration would be the main relief and the relief of recovery of possession a consequential one and vice versa was explained by this Court in Kerala State and Others v. A.S. Thilakan and Others [2015 (1) KHC 326] . In paragraph 13, it was held thus:- RFA (Indigent) No.709 of 2016 :- 10 :- “Where the reliefs of declaration and recovery of possession, which are closely connected, are claimed in a suit and the relief of declaration is found to be barred the test to decide whether the relief of recovery of possession may be granted is whether the relief of recovery of possession is consequential to the declaration, or whether it is an independent substantive relief. In other words, the essential question is whether the document will stand in the way of the plaintiff's getting recovery of possession. Was he required to get the declaration before he could recover possession of the property. If the answer is in the negative, the declaration is unnecessary to grant the relief of recovery of possession.” 18. In the case at hand, as noticed supra, the main relief is for a declaration that the auction sale is void. In the absence of such a declaration, no other reliefs could ensue. The plaintiff seeks for recovery of possession on the strength of his title. But title has already passed to the third defendant by virtue of the auction held on 21.12.05 and Ext.A56 sale deed executed pursuant thereto. Unless and until the sale is set aside, the plaintiff is not entitled to seek for recovery of RFA (Indigent) No.709 of 2016 :- 11 :- possession. Therefore, the main relief in the suit is for setting aside the auction on the ground of fraud. Unless the said relief is granted, there cannot be a decree for recovery of possession. In the nature of the suit, the relief of recovery of possession is only ancillary to the main relief of declaration regarding the auction sale. Therefore, the contention of the learned counsel for the appellant that the suit would be governed by Article 65 of the Limitation Act fails. 19. Thus, on all fours, I concur with the finding of the trial court that the suit is barred by limitation. 20. Coming to the plea of res judicata, the defendants contend that the present suit is barred by virtue of the judgments in W.P.(C) No.34808/ 2005 as affirmed in W.A. No.1170/2006, the judgment in W.P.(C) No.10189/2006 as affirmed in W.A. No.1546/2006 and also by virtue of the judgments in W.P.(C) No.2700/2007 and W.A. No.2433/2009 arising therefrom. 21. The auction sale was held on 21.12.2005. RFA (Indigent) No.709 of 2016 :- 12 :- The plaintiff approached this Court in W.P.(C) No.34808/2005. As per judgment dated 23.12.2005, this Court directed the OTS benefit to be extended till 28.02.2006 and further, leaving open the right of KFC to sell the property to the highest bidder in cause of failure. This Court took note of the fact that auction has been conducted in respect of the property and that the highest price offered is `66.5 lakhs. The said judgment was affirmed in appeal by the plaintiff in W.A. No.1170/2006. Ext.A30 letter dated 24.01.2006 was issued by KFC to the plaintiff granting one time settlement facility whereby, the plaintiff was put on notice that the total balance outstanding as on 21.01.2006 is `78,68,807/- and that the accounts could be closed on payment of `67,22,807/-, if paid before 28.02.2006. The plaintiff failed to avail the benefit of the judgment and the OTS. The period expired on 28.02.2006. 22. On 01.03.2006, KFC issued Ext.A41 communication to the third defendant confirming the RFA (Indigent) No.709 of 2016 :- 13 :- sale and calling upon remittance of the balance sale consideration. Thereupon, the plaintiff filed W.P.(C) No.10189/2006 with the following reliefs:- - “a) issue a writ of certiorari calling for the records leading to Ext.P7 and quash the original of the same. - b) Declare that the sale in favour of the 3[rd] respondent cannot be confirmed as the entire proceeding leading to Ext.P7 is vitiated by malafides. - c) issue a writ of mandamus or any other appropriate writ, order or direction directing the respondents not to hand over the possession of the property to the 3[rd] respondent. - d) issue a writ of mandamus or any other appropriate writ, order or direction directing the respondents to grant OTS facility to the petitioner on the basis of Ext.P2 and grant reasonable time to remit the amount. - e) grant such other reliefs prayed for from time to time including cost of this proceedings.” 23. Ext.P7 therein is the intimation dated 01.03.2006 referred to above and marked as Ext.A41 in the suit, whereby the KFC intimated the third RFA (Indigent) No.709 of 2016 :- 14 :- defendant about the confirmation of the sale. As is evident from the reliefs claimed, there was a specific challenge against the sale held by KFC in favour of the third respondent as vitiated by mala fides. As per judgment dated 14.08.2006, the writ petition was dismissed by this Court. The plea of material irregularity in the conduct of sale was specifically turned down. It would be relevant to refer to certain findings in the said judgment which reads thus:- “According to him, the property worth Rs.1 crore or more is knocked down for only Rs.66,50,000/-. However, he could not point out any material irregularity in the same. In the absence of any material irregularity in the sale itself, I cannot interfere with the same, especially since a third party has obtained valuable rights in respect of the properties paying the entire sale price.” 24. In the concluding portion of the judgment it was further held that the petitioner could not point out any irregularity whatsoever. Though the judgment was challenged in W.A. No.1546/2006, the same was dismissed, as per judgment dated RFA (Indigent) No.709 of 2016 :- 15 :- 24.08.2006, a copy of which is marked as Ext.B6. A reference to the judgment shows that, the finding regarding by the learned single judge regarding absence of any irregularity regarding the sale was not even challenged in the appeal, but all that was sought for was time to settle the liability, which the learned Division Bench declined. 25. Thereafter, the fifth defendant, the partner of the plaintiff, filed W.P.(C) No.2700/2007 challenging the sale. The relief sought for in the writ petition read thus:- “i. declare that the sale of the property of the Ist respondent conducted and confirmed by Ext.P5 in favour of the 2[nd] respondent is a nullity being the result of fraud. ii. issue a writ of mandamus or any other writ or direction to direct the Ist respondent to receive full amounts due to it from the petitioners and permit the petitioners to redeem the mortgage. iii. direct the Ist respondent to return all documents of title to the Ist petitioner after full satisfaction of its demand, AND RFA (Indigent) No.709 of 2016 :- 16 :- iv. to issue such other writ, order or directions as this Hon'ble Court deems fit and proper.” 26. The sale was challenged on the ground of fraud. As per judgment dated 27.07.2009, the writ petition was dismissed. Challenging the said judgment, he preferred an appeal as W.A. No.2433/2009. After arguing the appeal for some time, at the request of the learned Senior Counsel who was appearing for the appellant, the writ petition and the writ appeal were permitted to be withdrawn. 27. The contention of the defendants is that, the present suit is barred by the principles of res judicata in view of the aforesaid writ proceedings. As to what constitutes res judicata has been succinctly stated by the Apex Court in Jaswant Singh v. Custodian of Evacuee Property [(1985) 3 SCC 648] . It was held that:- “..... In order that a defence of res judicata may succeed it is necessary to show that not only the cause of action was the same but also that the plaintiff had an opportunity of getting the relief which he is now RFA (Indigent) No.709 of 2016 :- 17 :- seeking in the former proceedings. The test is whether the claim in the subsequent suit or proceedings is in fact founded upon the same cause of action which was the foundation of the former suit or proceedings. .....” The learned Senior Counsel for the respondents rely on the following judgments by the Apex Court and this Court to contend that, the decision in a writ proceeding constitutes res judicata in a subsequent suit on the issue:- - (1) Union of India v. Nanak Singh - [AIR 1968 SC 1370] - (2) Trivandrum Golf Club Rep. by its Secretary v. State of Kerala and Others [2010 2 KLT 996] - (3) V. O. Vakkan & Sons (M/s) and Another v. State of Kerala and Others [2010 3 KLT 831] 28. He would also rely on the judgments of the Apex Court in State of U. P. v. Nawab Hussain [1977 (2) SCC 806] and the judgment of this Court in Jayachandran v. High Court of Kerala [2010 4 KLT 49] to contend that the doctrine of constructive RFA (Indigent) No.709 of 2016 :- 18 :- res judicata which embodies the “might and ought” principle also applies to such proceedings. Though the learned counsel for the appellant does not controvert the said legal propositions, he contends that in the instant case the causes of action for the writ proceedings and for the suit are different and hence res judicata does not apply. He relies on the judgment of the Apex Court in Nagabhushanammal v. Chandikeswaralingam [2016 (2) KLT 2099 (SC)] . 29. W.P.(C) No.34808/2005 essentially related to the grant of one time settlement facility to the plaintiff. The writ petition was filed prior to the sale in question. It needs no further deliberation to hold that the same does not constitute res judicata in the challenge against the sale. 30. In W.P.(C) No.10189/2006 and W.A. No.1546/2006 which arose therefrom, the auction sale was specifically under challenge. The learned counsel for the appellant submits that the cause of action for the writ proceedings was the auction sale whereas the cause of action for the present suit is the execution of Ext.A56 sale deed, which RFA (Indigent) No.709 of 2016 :- 19 :- being a subsequent cause of action, the earlier writ proceedings does not operate as a res judicata. Though the learned counsel is right in his submission that the subsequent cause of action on a different set of facts will not constitute res judicata, I am not in agreement with his contention that the present suit is founded on a different cause of action. In Sakthi Ceramics v. Supreme Ceramics [2013 (1) KLT 326] while deliberating upon the causes of action in a suit alleging passing off and a suit based on registered trade mark, this court held that it cannot be said that the causes of action for the two suits are entirely different. It was held, “At least in part, the cause of action in a suit against passing off is involved in a suit for injunction based on registered trade mark as well”. In the instant case, the contention of the plaintiff that the cause of action insofar as it relates to the challenge against Et.A56 sale deed is to be viewed totally independent of the cause of action insofar as it relates to the challenge against the auction held on 21.12.2005 cannot be RFA (Indigent) No.709 of 2016 :- 20 :- sustained since the cause of action is essentially one and the same or at least major portion of the bundle of material facts which constitute cause of action overlaps. As pointed out in my discussion on the finding on the issue of limitation, the cause of action for the present suit, on the averments as made in the plaint, is the auction sale held on 21.12.2005 and the proceedings leading thereto. In view thereof, the present suit which is on the same cause of action, is barred by the principles of res judicata. Assuming that any grounds available to the plaintiff in the earlier round of litigation was not urged by him, he is disabled from urging the same later, on the principles of constructive res judicata. I concur with the finding of the trial court that the present suit is barred by res judicata. 31. In W.P.(C) No.2700/2007 filed by the 5[th] defendant-the partner of the plaintiff, the plea of fraud was specifically turned down by this Court as per Ext.B18 judgment dated 27.07.2009. In the appeal which arose therefrom as W.A. No.2433/2009, the writ RFA (Indigent) No.709 of 2016 :- 21 :- petition and the appeal were permitted to be withdrawn. In Ext.B19 judgment, the Division Bench made certain observations which are of significance:- “7. After arguing the matter for quite some time, learned senior counsel submits that the appellant will not pursue the matter any further if he is permitted to withdraw not only the writ petition but the writ appeal as well. 8. xxxxx However, since it is brought to our notice that the sale has already been confirmed and the auction purchaser put in possession of the property some time back, we are of the view that the prayer made by the learned senior counsel can be granted. We do so. Therefore, the writ petition and writ appeal are dismissed as withdrawn.” 32. There was a specific undertaking by the appellant that the matter will not be pursued any further. It is accordingly that the writ appeal and the writ petition were permitted to be withdrawn. As noticed supra, the said writ petition and writ appeal were preferred by the third defendant in his capacity as a partner of the firm. The plaintiff RFA (Indigent) No.709 of 2016 :- 22 :- has no case that the said proceedings were initiated without his knowledge or consent. In fact, a reading of the plaint reveal otherwise. In paragraph VIII of the plaint and in the cause of action, the plaintiff has relied on the withdrawal of the writ petition and writ appeal thereby specifically admitting, acknowledging and accepting the same. Is it that the said proceedings and undertaking before this Court has no consequence at all? 33. As to what would be the effect of the withdrawal of the writ proceedings without reserving the right to sue on the very same cause of action, the Apex Court has in Sarguja Transport Service v. STAT [1987 (1) SCC 5] and Upadhyay and Co. v. State of U.P. and Others [1999 (1) SCC 81] held that when a writ petition under Article 226 is withdrawn without permission to file a fresh writ petition, though a subsequent writ petition would be barred, that will not bar the remedy by way of a suit. Therefore, it has to be held that the bar under Order XXIII Rule 1(3) as such does not apply RFA (Indigent) No.709 of 2016 :- 23 :- to the present suit. 34. However, it would be apposite to refer to the following observations by the Apex Court therein. “..... But we are of the view that the principle underlying R.1 of O.23 of the Code should be extended in the interests of administration of justice to cases of withdrawal of writ petition also, not on the ground of res judicata but on the ground of public policy as explained above. It would also discourage the litigant from indulging in bench-hunting tactics.” 35. Here, as noticed supra, a finding was entered into in the writ petition on the merits, against the contentions of the plaintiff herein. The writ appeal therefrom was argued for some time and not having found favour with the learned Division Bench, the learned Senior Counsel appearing for the plaintiff herein-appellant therein submitted that the issue would not be prosecuted further and it is accordingly that the writ proceedings were permitted to be withdrawn. It is after having given such an undertaking before RFA (Indigent) No.709 of 2016 :- 24 :- the Division Bench of this Court that the instant suit has been instituted. If the Division Bench had proceeded to dismiss the appeal on its merits that would have constituted res judicata. After having misled this Court, the plaintiff has instituted the present suit. It cannot be said that such a course adopted has no consequence at all. The plaintiff is estopped by his conduct from instituting the present suit. Therefore, the plaintiff is estopped from instituting the present suit. 36. Finally coming to the challenge against the sale on the ground of fraud, though the trial court held against the maintainability of the suit, proceeded to consider the plaint case regarding fraud. I also deem it proper to adopt such course. The learned counsel for the appellant relying on Kerr, on “Fraud and Mistake” submits that, to establish a case of fraud very often only circumstantial evidence would be available and that court shall not insist on direct and positive evidence. Giving stress on the following statement therein, he contends that the circumstances pointed RFA (Indigent) No.709 of 2016 :- 25 :- out have not been explained by the defendants and hence fraud has to be inferred; the passage reads thus:- “..... If the facts established afford a sufficient and reasonable ground for drawing the inference of fraud, the conclusion to which the proof tends must, in the absence of explanation, or contradiction, be adopted. .....” 37. The learned Senior Counsel appearing for the respondents would on the other hand rely on the judgment of the Apex Court in Bishundeo Narain and Another v. Seogeni Rai and Others [AIR 1951 SC 280] and submit that the plaint is bereft of the details of fraud in the absence of which any evidence in the said regard cannot be of any avail. He drew my attention to the following observations of the Apex Court:- “..... Now if there is one rule which is better established than any other, it is that in cases of fraud, undue influence and coercion, the parties pleading it must set forth full particulars and the case can only be decided on the particulars as laid. There can be no departure from them in evidence. General allegations RFA (Indigent) No.709 of 2016 :- 26 :- are insufficient even to amount to an averment of fraud of which any Court ought to take notice, however strong the language in which they are couched may be and the same applies to undue influence and coercion. See O.6, R.4, Civil P. C.” 38. To bring home the plea of fraud, the learned counsel for the appellant initially impressed upon me the the scope and import of Section 29 of the KFC Act. Elaborating upon the Public Trust doctrine, the counsel for the appellant placed reliance on Mahesh Chandra v. Regional Manager, U.P. Financial Corpn. [(1993) 2 SCC 279] . The learned counsel submitted that though the said judgment was subsequently overruled by a three Judge Bench of the Apex Court in Haryana Financial Corpn. v. Jagdamba Oil Mills [(2002) 3 SCC 496] , insofar as it proceeded to lay down the steps to be followed for sale of an asset by KFC under Section 29, the principle regarding Public Trust doctrine as laid down in Mahesh Chandra v. Regional Manager, U.P. Financial Corpn. (supra) was again reiterated by the Apex Court in State of RFA (Indigent) No.709 of 2016 :- 27 :- Assam v. Susrita Holdings Pvt. Ltd. [2014 AIR SCW 3084] , it is argued that the materials before the court proves that KFC have not acted fairly and reasonably and in public interest, while conducting the sale in question. 39. In Haryana Financial Corpn. v. Jagdamba Oil Mills (supra), the Apex Court observed that while the financial corporation as an instrumentality of the State deals with public money and the approach has to be public oriented, there is a corresponding duty cast upon the borrowers to repay the instalments in time unless prevented by insurmountable difficulties. The Corporation has to cater to the needs of the other financial borrowers. The Apex Court at paragraph 9 of the judgment held thus:- “In matters like the present one, fairness cannot be a one-way street. Corporations borrow money from the Government or other Financial Corporations and are required to pay interest thereon. Where the borrower has no genuine intention to repay and adopts pretexts and ploys to avoid payment, he cannot make the grievance that the Corporation was not acting fairly, RFA (Indigent) No.709 of 2016 :- 28 :- even if requisite procedures have been followed.” 40. Relying upon the judgment of the Supreme Court in Kerala Financial Corpn. v. Vincent Paul [(2011) 4 SCC 171] , the learned counsel for the appellant would contend that various guidelines have been issued by the Supreme Court in the said judgment regarding conduct of sale by the KFC to be followed until rules or guidelines are framed in the said regard. The learned counsel submits that in the instant case, there is violation of the said guidelines and hence the sale is to be interfered with. The learned counsel fairly submits that the Apex Court has thereafter in Micro Hotel P. Ltd. v. M/s Hotel Torrento Ltd. (AIR 2012 SC 3291) observed that the guidelines issued by the Apex Court in Kerala Financial Corpn. v. Vincent Paul (supra) is only prospective. In M/s S.J.S. Business Enterprises (P) Ltd. v. State of Bihar [AIR 2004 SC 2421] , the Apex Court held that the Corporation should give adequate publicity to the sale and should not act unfairly. He submits that, at any RFA (Indigent) No.709 of 2016 :- 29 :- rate, fair play has to be ensured. 41. Keeping in mind the aforesaid legal principles I now proceed to consider as to whether the auction sale in question is vitiated by fraud. The learned counsel for the appellant has left no stone unturned, in his attempt to drive home the contention that the auction sale held by KFC is vitiated by fraud. 42. The allegation in the plaint is that, the third defendant with whom the plaintiff had monetary transactions had an eye over the property in question. He influenced the officials of the KFC, colluded with them and employed fraud in selling out the property to the third defendant. Going by the plaint averments, the instances/ circumstances enabling inference of fraud are:- (i) No sufficient notice/publication of the sale was effected. Publication was effected in only one daily. (ii) Only tender was held; conduct of a public auction was willfully avoided. (iii) No upset price was fixed for the RFA (Indigent) No.709 of 2016 :- 30 :- ## property. (iv) The property worth more than `1 Crore was sold for `65.5 lakhs. Ext.A25 valuation report dated 14.03.2005 submitted by the plaintiff was not taken into consideration by the KFC. - (v) The tenderers were the friends or - relatives of the third defendant. (vi) The suit OS 339/05 filed by the third defendant against the plaintiff for recovery of money, wherein the property in question was attempted to be attached, a Receiver appointed but failed, was rejected for non payment of balance court fee after the auction by KFC. 43. As regards the allegation that no sufficient publication of the auction was made, it is pertinent to note that in W.P.(C) No.10189/2006 filed by the plaintiff herein as petitioner, it is specifically averred that apart from the publication of the sale notice in Ext.A28 Mathrubhumi daily, publication was effected in yet another daily, a copy of which was marked as Ext.P9 therein. Therefore, the said allegation is RFA (Indigent) No.709 of 2016 :- 31 :- baseless. Even going by the plaintiff's case, he came to know about the intended sale from the newspaper which indicates that there was sufficient publication regarding the proposed sale. 44. As regards the contention that without conducting a public auction only tenders were invited, it is to be noticed that there were no specific rules or guidelines regarding the sale of assets by the KFC. Conduct of sale by tenders is also a well accepted mode. There has been an auction, as is evident from Ext.A23 proceedings of auction between the tenderers, in order to fetch the maximum value. The auction amount is higher than the value fixed by the KFC. It could not be established by the plaintiff that there were any other willing purchasers who were ready to purchase the property for a higher price and that they were kept out of knowledge. 45. As regards the allegation that the other tenderers were either friends or relatives of the third defendant, when the sale is held pursuant to a public notice, even assuming that the other RFA (Indigent) No.709 of 2016 :- 32 :- tenders were friends or relatives of the third defendant, that by itself cannot vitiate the sale. KFC cannot be found fault with for the nonparticipation of the others in spite of due notice. That apart, the very fact that one of the tenderers came forward as PW3 to depose in favour of the plaintiff itself shows that the allegation of the plaintiff is not correct. 46. Yet another contention is that no upset price was fixed for the property. It is seen from the records that prior to the sale notice, no valuation was done and no upset price was fixed. However, after the notice, Ext.A24 valuation report was obtained by the KFC. Based on the same, the reserve price was fixed at `50.76 lakhs. The auction amount is higher than the value arrived at in Ext.A24 valuation report. The plaintiff has a grievance that the property is worth more than `1 Crore, that he had obtained a valuation report viz. Ext.A25 dated 14.03.05 in respect of the property, which though was passed on to the KFC was not taken RFA (Indigent) No.709 of 2016 :- 33 :- into consideration. According to the plaintiff as per Ext.A25, the valuation for the property is `1,00,98,000/-. Therefore, the property has been under valued and sold, is the contention. A reading of Ext.A25 valuation report obtained by the plaintiff reveals that therein the age of the building is stated to be two years. The report is dated 14.03.05. Admittedly the building was constructed during the period 1995-96. Therefore, the said valuation cannot be accepted as such. It is calculating the age of the building as two years that the value is fixed at `1,00,98,000/-. Making deductions by 10% per year towards depreciation, it can be seen that the value would be around `50 lakhs which is in tune with Ext.A24 valuation report obtained by the KFC. Though the plaintiff relies on the claim of the third defendant in the suit filed by him as OS 339/05 especially in the attachment application and Receiver application to the effect that the property is worth more than `1 Crore, Ext.A24 valuation report obtained by the KFC RFA (Indigent) No.709 of 2016 :- 34 :- and Ext.A25 valuation report prepared by the plaintiff would bring to light the actual value of the property. Therefore, the contention based on valuation cannot be accepted. 47. The rejection of OS 339/2005 filed by the third defendant against the plaintiff for realisation of money, for non-payment of the balance court fee is not sufficient enough to infer fraud and collusion. 48. Apart from the allegations as noticed supra, the learned counsel for the appellantplaintiff points out various other circumstances from which according to the learned counsel fraud is to be inferred. (a) The details of the building, including the number of floors, plinth area etc. have not been provided in the sale notice. (b) The details of the property including the boundaries, survey number, that it has State Highway frontage etc. have not been given in the sale notice. (c) The amount due to KFC or the upset price RFA (Indigent) No.709 of 2016 :- 35 :- has not been specified in the sale notice. - (d) Notice of sale was not given to the - plaintiff. - (e) Though as per the tender conditions, - auction was to precede the opening of tenders, in fact it was held vice-versa. (f) Though as per the tender notice the earnest money deposit was to be furnished by way of demand draft, six out of the seven tenderers, including the third defendant, made the deposit by way of cash. (g) Ext.A43 encumbrance certificate regarding the property in the custody of the KFC was obtained by one Jagadeesan. He is also the scribe in Ext.A56 Sale Deed. (h) The mistake in Ext.A43 encumbrance certificate regarding the description of the building numbers is seen carried on into Ext.A14, the plaint in OS 339/2005 filed by the third defendant against the plaintiff and also in the attachment application filed therein. This reveals the collusion between the third defendant, RFA (Indigent) No.709 of 2016 :- 36 :- Jagadeesan and KFC. (i) There has been interpolation in Ext.A23 report regarding the tender proceedings. (j) The building in question was never valued by KFC. The report regarding the valuation of the building, forming part of Ext.A24, is a fabricated document. (k) The signatures of the Deputy Manager (Tech) Sri.Varghese Joseph seen in the valuation report is forged. 49. Though such contentions are raised during the course of the arguments, such contentions are not supported by any pleading. Even in the Chief Examination of the plaintiff as PW1, he does not raise such contentions. Such contentions are not seen raised in the trial court also. That apart, in view of the other circumstances available in the case, an inference of fraud and collusion cannot be easily drawn. As regards the valuation report by the KFC, the contention of the plaintiff as PW1 in his chief examination is that, the valuation report was prepared by persons who are not competent RFA (Indigent) No.709 of 2016 :- 37 :- enough. There is no other complaint against the report. 50. As evidenced by Ext.A42 dated 15.05.2001, KFC took possession of the property in terms of Section 29 of the SFC Act. On 13.11.02 a one time settlement facility was offered to the plaintiff for `25.5 lakhs. The plaintiff did not avail the opportunity. As per judgment in W.P.(C) No.34808 of 2005, this Court directed extension of the one time settlement facility till 28.02.06 in order to give another opportunity to the plaintiff to save his property. This Court had in the said judgment even granted permission to the plaintiff to effect private sale of the property. In W.P.(C) No.2700/07 filed by the fifth defendant, who is a partner of the plaintiff, the second petitioner who is a third party, was impleaded as a person stated to be an intending and willing purchaser of the property. In the said writ petition an interim order was passed by this Court calling upon the second petitioner therein to deposit the amount offered. However, no deposit was effected. It proved the lack of bona RFA (Indigent) No.709 of 2016 :- 38 :- fides. Even though going by the plaintiff's case, he came to know about the proposed sale from the sale notice published in the newspaper he did not raise any complaint regarding the non-inclusion of details regarding the property and the building. No such contention was raised even in the writ proceedings. Similarly no challenge was raised against the non-conduct of public auction and also regarding the opening of the tender prior to auction sale. Though serious challenge is made against the genuineness and acceptability of Ext.A24 valuation report prepared by the KFC, as noticed supra in the proof affidavit of PW1, the only grievance against Ext.A24 is that it has been prepared by incompetent persons. 51. Records reveal that from 15.05.01 several opportunities were available for the plaintiff to settle the liability with the KFC. The plaintiff was aware that the property in question is being proceeded against and is brought for sale. KFC obtained a valuation report in respect of the property which, when considered along with Ext.A25 RFA (Indigent) No.709 of 2016 :- 39 :- valuation report furnished by the plaintiff after making deduction for depreciation (as noticed supra), the value, more or less tallies. The alleged suspicious circumstances were either raised and turned down in the earlier writ proceedings or not raised. Various suspicious circumstances raised during the course of arguments are either not pleaded or spoken to by the plaintiff as PW1, and hence the defendants were not called upon to or did not have an opportunity to answer the same. To find a plea of fraud, mere suspicion is not sufficient. Fraud has to be established beyond reasonable doubt. On appreciating the entire materials, the trial court held that an inference of fraud cannot be drawn. I do not find reasons sufficient enough to arrive at a different conclusion. In the result, this appeal fails and is accordingly dismissed. No costs. Sd/- **SATHISH NINAN JUDGE** kns/- //True Copy// P.S. to Judge RFA (Indigent) No.709 of 2016 :- 40 :- “Court fee to be recovered in terms of Order XXXIII Rule 11 CPC” vide order dated 17.07.2019. Sd/Deputy Registrar