MARIAMMA VARGHESE v. UNION OF INDIA & ORS

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ``` THE HONOURABLE MR. JUSTICE GOPINATH P. ``` ``` WEDNESDAY, THE 18[TH] DAY OF JANUARY 2023 / 28TH POUSHA, 1944 ``` ## **`WP(C) NO. 1597 OF 2023`** ## **`PETITIONER:`** ``` MARIAMMA VARGHESE W/O.K.T.VARGHESE, AGED 80 YEARS, KAVUMKOTTU VEEDU, ESM COLONY, KULATHUPUZHA P.O, KOLLAM, PIN – 681 310. ``` ``` BY ADVS. P.T.JOSE S.ASHITHA ABEY AUGUSTINE ALTHAF P.A. JAYASANKAR S.S. ``` ## **`RESPONDENTS:`** |`1`|`UNION OF INDIA`| |---|---| ||`REPRESENTED BY THE SECRETARY`| ||`MINISTRY OF FINANCE, NEW DELHI, PIN – 110 001.`| |`2`|`THE REGISTRAR ,DEBT RECOVERY TRIBUNAL II ERNAKULAM`| ||`1ST FLOOR, KSHB BUILDING,`| ||`PANAMPILLY NAGAR, ERNAKULAM, PIN – 682 036.`| |`3`|`STATE BANK OF INDIA`| ||`REP.BY MANAGER, KOLATHUPUZHA BRANCH`| ||`KOLATHUPUZHA, KOLLAM DISTRICT, PIN – 691 310.`| |`4`|`THE AUTHORIZED OFFICER/CHIEF MANAGER, STATE BANK OF`| ||`INDIA, STRESSED ASSETS RECOVERY BRANCH (SARB)`| ||`LMS COMPOUND, OPP.MUSEUM WEST GATE`| ||`VIKAS BHAVAN P.O.,THIRUVANANTHAPURAM, PIN – 695 033.`| ## **`OTHER PRESENT:`** ``` ADV. TOM K THOMAS (SC) ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 18.01.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` 2 W.P.(C)No.1597/2023 ## **JUDGMENT** Petitioner has approached this Court challenging Ext.P12 order of the Tribunal on I.A.Nos.2417/2022 and 3260/2022 in S.A.No.475/2022. 2. It is the case of the petitioner that the Tribunal has not properly appreciated the contentions taken by the petitioner before the Tribunal and has mechanically rejected the stay application by directing a payment of a sum of Rs.53 Lakh, as a condition for stay of further proceedings. It is submitted that the amount claimed by the Bank has not been properly adjudicated and the amount is to be adjudicated in the original application filed by the Bank under the provisions of the Recovery of Debts and Bankruptcy Act, 1993. It is submitted that the Tribunal has found that there is no prima facie illegality in the proceedings initiated under Section 14 of the SARFAESI Act, in a mechanical manner. It is submitted that out of the two items of property, which have been mortgaged, one item of property had already been taken 3 W.P.(C)No.1597/2023 possession of and the value that may be released by the sale of that property will be sufficient to clear the entire liability with the Bank. It is submitted that Interlocutory Applications filed for conducting valuation or for producing the valuation obtained by the Bank in respect of the property which has already been taken possession of has not been considered by the Tribunal. It is submitted that going by the Judgment of the Supreme Court in **Mardia Chemicals v. Union of India; 2004(4) SCC 311,** the proceedings under Section 17 of the SARFAESI Act are in the nature of original proceedings. It is also submitted that the Supreme Court has set aside the provisions of the SARFAESI Act to the extent it required a pre-deposit to be made as a condition for maintaining an application under Section 17 of the SARFAESI Act. Therefore, it is submitted, the Tribunal could not have imposed any condition of deposit for the grant of stay. 3. Adv. Tom K. Thomas, the learned counsel appearing for the respondent Bank would submit that the contentions taken by the petitioner are without any merit whatsoever. It is submitted that the Tribunal has considered the contentions 4 W.P.(C)No.1597/2023 taken in the Interlocutory Applications and has found that there was no prima facie illegality in the proceedings adopted by the Bank under Section 14 of the SARFAESI Act. It is submitted that the Supreme Court in **Mardia Chemicals (supra),** has concluded that it will be open to the Tribunal to grant stay/interim order subject to any condition and therefore it is not open to the petitioner to contend that the Tribunal should not have imposed any condition. It is submitted that the Supreme Court only frowned upon the requirement of the pre-deposit as a condition for maintaining an application under Section 17 of the SARFAESI Act and that by itself does not mean that the Tribunal could not impose any condition for the grant of stay. It is submitted that the contention that the amount has not been adjudicated, cannot be accepted, as the principal amount itself is Rs.1.87 Crores and the petitioner has only been required to make payment of a sum of Rs.53 Lakh as a condition for stay. It is submitted that even assuming without conceding that there is any merit in the dispute regarding the amounts now claimed by the Bank, the petitioner cannot have a dispute regarding the 5 W.P.(C)No.1597/2023 principal amount. It is submitted that the condition imposed by the Tribunal is less than half of the principal amount (as claimed in the original application filed in the year 2018) as due from the petitioner. It is submitted that the Tribunal has neither failed to exercise any jurisdiction vested in it nor has it exceeded any jurisdiction vested in it. It is submitted that the petitioner has an effective alternative remedy of appeal under the SARFAESI Act and therefore the writ petition is clearly not maintainable. 4. Having heard the learned counsel appearing for the petitioner and the learned counsel appearing for the respondent Bank, I am of the opinion that there is considerable merit in the contention taken by the learned counsel appearing for the respondent Bank, that Ext.P12 order is not liable to be interfered with the exercise of jurisdiction under Article 226 of the Constitution of India. No grounds are made out even to exercise the jurisdiction of this Court under Article 227 of the Constitution of India, as I cannot find that the Tribunal has failed to exercise any jurisdiction vested in it or has exceeded the limits of any 6 W.P.(C)No.1597/2023 jurisdiction vested in it. The contention taken by the learned counsel appearing for the petitioner that the amount claimed is disputed also does not compel me to take a view in favour of the petitioner on account of the fact that the condition imposed by the Tribunal appears to be less than half of the principal amount claimed by the Bank in the original application filed before the Tribunal in 2018. The judgment of the Supreme Court in **Mardia Chemicals (supra),** makes it clear that it will be open to the Tribunal, while considering an application under Section 17 of the SARFAESI Act, to impose a condition of deposit. Therefore the contention of the petitioner on the basis of the findings in paragraphs 59 and 64 of the judgment in **Mardia Chemicals (supra),** does not appeal to this Court. The writ petition fails and it is accordingly dismissed. 5. Faced with this situation the learned counsel appearing for the petitioner submits that the petitioner may be given two weeks time to approach the Debts Recovery Appellate Tribunal by filing an appeal and also having regard to the facts and circumstances of the case, the proceedings 7 W.P.(C)No.1597/2023 for taking physical possession of the secured asset which is scheduled to be held on tomorrow (19-01-2023) may be kept in abeyance for a period of two weeks to enable the petitioner to approach the Debts Recovery Appellate Tribunal, challenging Ext.P3 order. 6. Having regard to the finding in this judgment that the remedy of the petitioner lies in approaching the Debts Recovery Appellate Tribunal by filing a Appeal under Section 18 of the SARFAESI Act, I am of the view that the request made by the learned counsel appearing for the petitioner is reasonable. Accordingly, it is directed that the steps for taking physical possession of the secured asset shall stand adjourned by a period of two weeks from today (till 02-02-2023) to enable the petitioner to avail any statutory appellate remedy that may be available to her. **Sd/GOPINATH P. JUDGE** ats 8 W.P.(C)No.1597/2023 ## **`APPENDIX OF WP(C) 1597/2023`** ``` PETITIONER EXHIBITS ``` ``` Exhibit 1TRUE COPY OF SA 475/2022 BEFORE DRT II ERNAKULAM ``` - `Exhibit 2 TRUE COPY OF STAY PETITION IA 2417/2022 IN SA 475/2022` - `Exhibit 3 TRUE COPY OF NOTICE DATED 22/9/2022 ISSSUED BY ADV COMMISSIONER` - `Exhibit 4 TRUE COPY OF ADVANCE PETITION I.A.2486/2022` - `Exhibit 5 TRUE COPY OF ORDER IN IA 2486/2022 DATED 27/9/2022` - `Exhibit 6 TRUE COPY OF THE REGISTERED NOTICE DATED 24/9/2022` - `Exhibit 7 TRUE COPY OF THE NOTICE DATED 26/10/2022 ISSUED BY ADV COMMISSIONER` - `Exhibit 8 TRUE COPY OF JUDGMENT IN OP(DRT) 389/2022 DATED 27/10/2022` - `Exhibit 9 TRUE COPY OF I.A.3260/2022 DATED 22/11/2022` - `Exhibit 10 TRUE COPY OF I.A.3261/2022 DATED 22/11/2022` - `Exhibit 11 TRUE COPY OF AMENDMENT APPLICATION I.A.3259/2022 DATED 22/11/2022` - `Exhibit 12 TRUE COPY OF ORDER DATED 24/11/2022 BY DRT II ERNAKULAM` - `Exhibit 13 TRUE COPY OF THE NOTICE DATED 12/1/2023 ISSUED BY ADV COMMISSIONER`