Mary Koshy @ Mary Varghese and others v. Authorized Officer, Muthoot Fincorp Limited; Samson and Sons Builders and Developers (P) Limited; Debts Recovery Appellate Tribunal, Chennai; Debts Recovery Tribunal-II, Panampilly Nagar, Ernakulam

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN** ## **WEDNESDAY,THE 06TH DAY OF MARCH 2019 / 15TH PHALGUNA, 1940** ## **WP(C).No. 42188 of 2018** ## **PETITIONERS:** - **1 MARY KOSHY @ MARY VARGHESE, AGED 75 YEARS DAUGHTER OF M.G. KOSHY,MUTHOOR HOUSE, 3/ 245(1), MUTTADA P.O, TRIVANDRUM-695025.** - **2 SUSAN KOSHY @ SUSAN P.KOSHY, AGED 74 YEARS DAUGHTER OF M.G. KOSHY, 194,PANAMPALLY NAGAR, KOCHI-682036** - **3 SARAMMA KOSHY @ SARAMMA JACOB, AGED 70 YEARS DAUGHTER OF M.G. KOSHY, PULIMOOTIL HOUSE, PULLAD P.O, PATHANAMTHITTA.** - **4 GEORGE KOSHY, AGED 68 YEARS SON OF SRI.M.G. KOSHY, MARUCOIKAL HOUSE, BLRA 5, BRIGADE LANE, TC.12 /1403,VIKASBHAVAN, P.O, THIRUVANANTHAPURAM-695033** - **5 ANNIE KOSHY @ ANNIE MATHEW, AGED 66 YEARS DAUGHTER OF SRI.M.G. KOSHY, QUARTERS NO.14, MEERA BAI POLYTECHNIC STAFF QUARTERS, MAHARANI BAR, NEW DELHI-110065, CURRENTLY RESIDING AT MARUCKOIKAL HOUSE, BLRA 5, BRIGADE LANE, TC 12/1403.,VIKAS BHAVAN, P.O, THIRUVANANTHAPURAM-695033.** - **6 JACOB KOSHY, AGED 63 YEARS SON OF SRI.M.G.KOSHY, MARUCOIKAL HOSUE, BLRA 5, BRIGADE LANE, TC 12/1403, VIKAS BHAVAN, P.O, THIRUVANANTHAPURAM-695033.** - **7 THANKAMMA KOSHY, AGED 58 YEARS DAUGHTER OF SRI.M.G. KOSHY, 45/476,PUTHENPARAMBIL, VENNALA P.O, KOCHI-682028.** - **8 RACHEL KOSHY @ RACHEL ROY GEORGE AGED 61 YEARS DAUGHTER OF SRI.M.G. KSOHY ,FLAT 5A, SFS TIARA APARTMENTS, MEDICAL COLLEGE P.O, TRIVANDRUM -695011.** - **9 MOHAN JOHN MATHEW, AGED 72 YEARS SON OF SRI.J.W.MATHEW, MADATHIPARAMBIL HOUSE, 51 VRINDAVAN COLONY, PATTOM P.O, TRIVANDRUM-695004.** **WP(C).No. 42188 of 2018** **2** **10 DEEPAK JOSEPH MATHEW, AGED 42 YEARS SON OF SRI.MOHAN JOHN MATHEW, MADATHIPARAMBIL HOUSE, 51 VRINDAVAN COLONY, PATTOM PO, TRIVANDRUM-695004.** - **11 BABITHA SAIRA MATHEW, AGED 40 YEARS SON OF SRI.MOHAN JOHN MATHEW, MADATHIPARAMBIL HOUSE, 51 VRINDAVAN COLONY, PATTOM P.O, TRIVANDRUM-695004.** **BY ADVS. SRI.ANIL S.RAJ SMT.ANILA PETER SMT.K.N.RAJANI SRI.RADHIKA RAJASEKHARAN P. SRI.SAJEN THAMPAN SRI.S.SUDHEESH** - **RESPONDENTS: 1 THE AUTHORIZED OFFICER MUTHOOT FINCORP LIMITED, MUTHOOT CENTRE, PUNNEN ROAD, THIRUVANANTHAPURAM-695039.** - **2 SAMSON AND SONS BUILDERS AND DEVELOPERS (P) LIMITED, TC. 3/ 678,KALIVEENA BUILDING, TKD ROAD, MUTTADA P.O, ,THIRUVANANTHAPURAM-695025,REPRESENTED BY ITS MANAGING DIRECTOR JOHN JACOB.** - **3 THE DEBT RECOVERY APPELLATE TRIBUNAL, CHENNAI, TAMIL NADU -600008,REPRESENTED BY ITS REGISTRAR.** - **4 THE DEBT RECOVERY TRIBUNAL-II, PANAMPILLY NAGAR, ERNAKULAM-682036, REPRESENTED BY ITS REGISTRAR. BY ADVS. SRI.BIJU .C. ABRAHAM SMT.S.AMBILY SRI.K.S.DILIP-SC SRI.SAJU N.A.** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06.03.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C).No. 42188 of 2018** **3** ## **J U D G M E N T** The petitioners impugn Exts.P15 and P17 orders of the Debts Recovery Tribunal, ('DRT' for short), Kerala and the Debts Recovery Appellate Tribunal, ('DRAT' for short), Chennai, respectively, as being illegal and unconstitutional. 2. Smt.Radhika Rajasekharan, the learned counsel for the petitioners, makes expansive submissions on the facts involved in this case, but concedes that Ext.P15 order of the DRT has already been challenged by the petitioners before the DRAT, Chennai, through Ext.P16 appeal. She submits that the DRAT, however, did not consider the appeal on its merits but rejected it merely because the petitioner did not make a pre-deposit, as is required under Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act ('the SARFAESI Act' for brevity). She says that, as has been declared by this Court in **Jagdev P.K v. Indian Bank, Kollam and another [2018 (3) KHC 131],** her clients being neither borrowers nor guarantors, they are not obligated to make a pre-deposit under Section 18 of the SARFAESI Act and therefore, that the DRAT was in **WP(C).No. 42188 of 2018** **4** error in dismissing their appeal through Ext.P17 order. 3. Sri.K.S.Dileep, the learned standing counsel appearing for the respondent – financial institution, au contraire, submits that the issue involved in this case is whether the petitioners can be treated as “Unpaid Vendors” and consequently, holding first charge over the property in question. He says that these issues have been considered by the DRT in its order and found otherwise and therefore, that the petitioners cannot obtain any locus to challenge the said order before this Court. He adds that since the petitioners have already invoked the statutory appellate remedy, by preferring Ext.P16 appeal before the DRAT, a challenge to the said order is not maintainable and that the petitioner must pursue the remedy before the DRAT, Chennai, if it is otherwise eligible to them. 4. After saying so, the learned counsel supports Ext.P17 order of the DRAT, by contending that a reading of Section 18 of the SARFAESI Act would make it obligatory on the petitioners to make a pre-deposit. **WP(C).No. 42188 of 2018** **5** 5. Even when I hear Sri.K.S.Dileep, the learned standing counsel for the respondent - Financial Institution as afore, the fact remains that in **Jagdev P.K (supra),** this Court has affirmatively declared that an appellant, who is neither a borrower nor a guarantor, would be under the rigor of Section 18 to make a pre-deposit. I have no reason to differ from this view and I have followed it in many of my subsequent judgments and I therefore, deem it appropriate to repeal the submissions of Sri.K.S.Dileep on these counts. 6. Coming to the issue of the validity of the Ext.P15 order of the DRT, I am certain that this Court cannot, at this point of time, enter into the merits of the challenge against it because, Ext.P16 appeal has already been preferred by the petitioners before the DRAT, Chennai. That appeal has been dismissed by the DRAT, Chennai, through Ext.P17 order only because the petitioners did not pre-deposit the amounts as required under Section 18 of the SARFAESI Act. 7. In such perspective, it is obvious that when I find that Ext.P17 order is incompetent, going by the ratio in **WP(C).No. 42188 of 2018** **6** **Jagdev P.K (supra),** the resultant position would be that Ext.P16 appeal becomes ripe for hearing by the DRAT, Chennai. Certainly, therefore, the petitioners can raise all contentions before the said Tribunal, which can then be defended the respondent – Financial Institution in terms of law, including by producing relevant and germane documents and materials, so that the issues involved can be resolved once and for all **,** subject to the remedies against the consequential order, in terms of law. 8. In the afore circumstances, I deem it apposite to follow **Jagdev P.K (supra),** and to set aside Ext.P17 order of the DRAT, Chennai; consequently directing the said Tribunal to take up Ext.P16 appeal and dispose of the same in terms of law. I am making this direction also because, I am informed by Smt.Radhika Rajasekharan that an amount of Rs.50,000/-, as is required in the case of a person other than being a borrower or guarantor, has already been deposited before the DRAT by the petitioners. 9. Resultantly, this writ petition is ordered directing **WP(C).No. 42188 of 2018** **7** the DRAT, Chennai, to consider and dispose of Ext.P16 appeal of the petitioners as expeditiously as is possible but not later than eight months from the date of receipt of a copy of this judgment. **Sd/-** rp **DEVAN RAMACHANDRAN JUDGE** **WP(C).No. 42188 of 2018** **8** ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF AGREEMENT FOR SALE DATED 31.7.2013. EXHIBIT P2 TRUE COPY OF SALE DEED DATED 1.8.2013. EXHIBIT P3 TRUE COPY OF AGREEMENT DATED 28.8.2013 FOR SALE OF TYPE E 4BBHK FLAT ON 9TH FLOOR.** **EXHIBIT P4 TRUE COPY OF NOTICE TO THE 2ND DEFENDANT DATED 15.12.2016** **EXHIBIT P5 TRUE COPY OF ACKNOWLEDGMENT FOR EXHIBIT P4** **EXHIBIT P6 TRUE COPY OF FIR DATED 16.12.2016 OF THE PEROORKADA POLICE STATION. EXHIBIT P7 TRUE COPY OF NOTICE TO THE 1ST RESPONDENT DATED 4.3.2017 EXHIBIT P8 TRUE COPY OF ACKNOWLEDGMENT FOR EXHIBIT P7 EXHIBIT P9 TRUE COPY OF SUMMARY OF CHARGES REGISTERED WITH THE REGISTRAR OF COMPANIES. EXHIBIT P10 TRUE COPY OF APPLICATION DATED 9.3.2017 FILED BY THE 1ST RESPONDENT BEFORE THE CJM, THIRUVANANTHAPURAM. EXHIBIT P11 TRUE COPY OF SEARCH REPORT ON THE 2ND RESPONDENT WITH ROC,KERALA EXHIBIT P12 TRUE COPY OF THE SA 207 OF 2017 FILED BEFORE THE HONOURABLE DRT-II,ERNAKULAM. EXHIBIT P13 TRUE COPY OF THE WRITTEN STATEMENT FILED BY THE 1ST RESPONDENT IN SA.207 OF 2017 EXHIBIT P14 TRUE COPY OF EXHIBIT B1(1)PRODUCED BY THE 1ST RESPONDENT. EXHIBIT P15 TRUE COPY OF THE ORDER DATED 22.10.2018 OF THE HONOURABLE DRT-II,ERNAKULAM. EXHIBIT P16 TRUE COPY OF THE APPEAL MEMORANDUM FILED BEFORE THE HONOURABLE DRAT,CHENNAI. EXHIBIT P17 TRUE COPY OF THE ODER OF THE HONOURABLE DRAT, CHENNAI DATED 14.12.2018**