N. M. KuriaKose S/O N. I. Mathew; A. V. Simon S/O Kora Varghese; P. V. Chackochan S/O P. C. Varkey v. The Kerala Financial Corporation and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE S.SIRI JAGAN** ## **MONDAY, THE 23RD DAY OF JULY 2012/1ST SRAVANA 1934** ## **WP(C).No. 34292 of 2009 (F)** **--------------------------------------** ## **PETITIONER(S):** ## **------------------------** **1. N.M.KURIAKOSE S/O. N.I.MATHEW, NIRAVATHUKANDATH HOUSE, AYAMKARA, PAINGATTOOR.P.O. KADAVOOR VILLAGE, KOTHAMANGALAM TALUK ERNAKULAM DISTRICT.** **2. A.V.SIMON S/O. KORA VARGHESE, AMBAZHACHALIL HOUSE, PUTHUPADY.P.O., KOTHAMANGALAM ERNAKULAM DISTRICT.** **3. P.V.CHACKOCHAN, S/O. P.C.VARKEY POTTACHAL HOUSE, KARUKODAM.P.O., KOTHAMANGALAM ERNAKULAM DISTRICT.** ## **BY ADV. SRI.D.KISHORE** ## **RESPONDENT(S):** - **-------------------------** **1. THE KERALA FINANCIAL CORPORATION REPRESENTED BY IT MANAGING DIRECTOR, HEAD OFFICE VELLAYAMBALAM,THIRUVANANTHAPURAM.** **2. THE BRANCH MANAGER, KERALA FINANCIAL CORPORATION PERUMBAVOOR BRANCH, SNDP BUILDINGS PERUMBAVOOR.** **3. M/S. GEECO PLASTICS VENGOOR, VENGOOR.P.O., KURUPPAMPADY, PERUMBAVOOR REPRESENTE BY ITS MANAGING PARTNER JOY VARGHESE** **4. JOY VARGHESE, MANAGING PARTNER M/S. GEECO PLASTICS, VENGOOR.P.O. RESIDING AT PANDIKUDITYIL HOUSE, VENGOOR.P.O., KUNNATHUNAD ERNAKULAM DISTRICT.** **tss** ## **W.P.(C) NO.34292/2009** **5. JOSE VARGHESE, PARTNER, M/S. GEECO PLASTICS, VENGOOR.P.O., RESIDING AT PANDIKUDIYIL HOUSE, VENGOOR, P.O. KUNNATHUNAD, ERNAKULAM DIST** **6. JAIMON, PARTNER M/S.GEECO PLASTICS, VENGOOR.P.O. RESIDING AT POOKKAVANAM, HOUSE PANIYELI.P.O., KOMBENADU VILLAGE KUNNATHUNAD ERNAKULAM DISTRICT.** **7. THE DEPUTY TAHSILDAR (RR) KERALA FINANCIAL CORPORATION, ERNAKULAM-682017.** ## **8. C.V.PAUL, CHIRACKAL HOUSE, VENGOOR.P.O. KURUPPAMPADY, ERNAKULAM DISTRICT.** **BY ADV. SRI.M.M.SAYED MUHAMMED, SC, KFC BY ADV. SRI.K.JAJU BABU BY ADV. SMT.M.U.VIJAYALAKSHMI BY ADV. SRI.K.I.ABDUL RASHEED BY ADV. SRI.K.A.SHAMSUDEEN BY ADV. SMT.S.LEELALAKSHMI BY ADV. SMT.N.RENJINEE DEVI BY ADV. SRI.MILLU DANDAPANI,SC,K.F.C. R7 BY GOVERNMENT PLEADER SRI.T.R.RAJESH** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 23-07-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **tss** ## **W.P.(C)NO.34292/2009** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:-** ## **P1:- COPY OF PROCEEDINGS NO.030 33411 & 9/5353/97 DTD. 25.11.97 OF IST RESPONDENT.** **P2:- COPY OF WRITTEN CONSENT SUBMITTED BY THE PETITIONERS BEFORE THE DIVISIONAL MANAGER, KFC DURING, NOVEMBER , 1999.** **P3:- COPY OF PROCEEDINGS NO.EKM 5300/4917/99 DTD. 17.12.99 OF IST RESPONDENT.** **P4:- COPY OF TITLE DEED IN RESPECT OF PROPERTY OWNED BY PETITIONERS GIVEN AS COLLATERAL SECURITY.** ## **P5:- COPY OF DECLARATION DTD. NIL.** ## **P6:- COPY OF AGREEMENT DTD 3.1.2000.** **P7:- COPY OF NOTICE OF ATTACHMENT OF IMMOVABLE PROPERTY ISSUED BY 7TH RESPONDENT.** **P8:- COPY OF NOTICE DTD. 15.7.2002 ISSUED BY 7TH RESPONDENT.** ## **P9:- COPY OF NOTICE DTD. 4.1.2003 ISUED BY 7TH RESPONDENT.** **P10:- COPY OF JUDGMENT DTD. 28.1.2003 IN OP.2235/2003 OF THIS HONOURABLE COURT.** **P11:- COPY OF THE JUDGMENT DTD. 23.10.2008 IN W.A. 1839/03 OF THIS HONOURABLE COURT.** **P12:- COPY OF SALE NOTICE PUBLISHED IN MATHRUBHOOMI DAILY DTD. 1.2.2006.** **P13:- COPY OF STATEMENT FILED BY RESPONDENTS 1 AND 2 IN WP(C) 4805/06.** **P14:- COPY OF PROCEEDINGS NO.160323310 & 90/326/06 DTD. 15.3.2006 OF 2ND RESPONDENT.** **P15:- COPY OF LETTER DT.D 13.11.2006 ISSUED BY 2ND RESPONDENT.** **P16:- COPY OF JUDGMENT DT.D 2.3.2007 IN WPC. 6121/07 OF THIS HONOURABLE COURT.** **tss** ## **W.P.(C) NO.34292/2009** **P17:- COPY OF ORDER DTD 16.3.2007 IN CMA. 1793/07 IN WPC. 6121/07 OF THIS HONOURABLE COURT.** **P18:- COPY OF COMMON JUDGMENT DTD. 22.9.2009 IN WA. 904/07 W.A. 1047/07 AND W.A. 947/07.** **P19:- COPY OF PROCEEDINGS KFL.160324110/745/06 DTD. 21.6.2006 OF 2ND RESPONDENT.** **P20:- COPY OF THE ENCUMBRANCE CERTIFICATE WITH RESPECT TO THE PETITIONERS' PROPERTY.** **RESPONDENT'S EXHIBITS:-** **R8(a):- COPY SALE DEED DTD.15.3.2007 IN RESPECT OF THE PROPERTIES.** **//TRUE COPY//** **P.A. TO JUDGE** **tss** ## **S. SIRI JAGAN, J.** **- - - - - - - - - - - - - - - - - - - - - - - W.P.(C)No.34292 of 2009 - - - - - - - - - - - - - - - - - - - - - - - Dated this the 23[rd] day of July, 2012** ## **J U D G M E N T** The petitioners are joint owners of 89 ares of property in re-survey No.98/1/2 in Block No.12 of Vengoor Village in Ernakulam District. As guarantors for repayment of loan amounts advanced by the Kerala Financial Corporation to the 3[rd] respondent firm, the petitioners mortgaged the said property as collateral security for repayment of the loan amounts due to the K.F.C. By Ext.P12 dated 1.2.2006, the KFC notified the said property for sale along with other properties belonging to the principal debtors and the petitioners for recovery of the loan amounts. The sale was effected pursuant to the same. The property was purchased by the 8[th] respondent. By Ext.P19, the KFC informed the 8[th] respondent that on payment of the balance amount, the property would be handed over to him. The petitioners have filed this writ petition challenging Exts.P12 & P19 orders. According to the petitioners, under Section 29 of the State Financial Corporations Act 1951, the properties of the guarantor cannot be taken over by the KFC, in view of ## W.P.(C)No.34292 of 2009 **-2-** the decision of the Hon'ble Supreme Court in **Karnataka** ## **State Financial Corporation v. N. Narasimhaiah & Ors.** **[(2008) 5 SCC 176]** , in which the Supreme Court has held that the surety can be proceeded only under Section 31 and not under Section 29 of the State Financial Corporations Act. The petitioner therefore seeks the following reliefs: - “a. declare that the sale of petitioner's property having an extent of 89 Ares (220 cents) in Block No.12, Re.Sy.No.98/1/2 of Vengoor Village u/s. pursuant to Exhibit P12 u/s. 29 of the State Financial Corporations Act, 1951 by respondents 1 and 2 in favour of 8[th] respondent is null and void in view of the law laid down by the apex court in Karnataka SFC V N. Narasimahaiah and other reported in (2008) 5 SCC 176. - b. call for the records leading to the passing of Exhibit P19 and quash the same to the extent it deals with the sale of 89 Ares (220 cents) of petitioners' property in Re.Sy.98/1/2, Block No.12 of Vengoor Village in favour of 8[th] respondent, by issuing a writ of certiorari or any other appropriate writ, direction or order.” 2. The learned Standing Counsel for the Kerala Financial Corporation points out that in respect of the sale of the very same property, the petitioners had earlier approached this Court by filing O.P. No.2235/2003 and by Ext.P10 judgment dated 28.01.2003, a learned Judge of this Court repelled the contentions of the petitioners against the ## W.P.(C)No.34292 of 2009 **-3-** sale of the said property, which has been confirmed by the Division Bench in W.A No.1839/2003, which was delivered on 23.10.2008, more than 2 ½ years after Ext.P12 notification of sale under Section 29 had been published by the KFC. Therefore, the petitioners are now estopped from contending that the sale of the petitioner's property which is given as collateral security cannot be proceeded against under Section 29 of the Act. 3. In answer to the same, the learned counsel for the petitioners points out that, W.P.(C).No. 2235/2003 was filed much prior to Ext.P12 notification under Section 29 and that related only to proceedings under the Revenue Recovery Act and not under Section 29 of the Act. It is further submitted that the principal debtors had earlier filed writ petitions and writ appeals challenging the sale of the petitioners' property also under Section 29 of the Act which were repelled on the ground that the guarantor has not come forward to challenge the sale and therefore the petitioners are entitled to challenge Exts.P12 & P19 W.P.(C)No.34292 of 2009 **-4-** separately. According to them, therefore, notwithstanding the dismissal of the earlier writ petition and writ appeal, they are entitled to maintain this writ petition. 4. I have considered the rival contentions in detail. 5. Ext.P12 notification for sale under Section 29 was published in newspapers on 1.2.2006. Ext.P19 communication was issued to the auction purchaser on 21.06.2006, long after the sale. The petitioners were admittedly aware of the same. They did not challenge the same within a reasonable time. Of course relying on decisions of this Court, the counsel for the petitioners would argue that insofar as the sale is illegal, does not in any way affect the right of the petitioners to challenge the sale simply because of the delay. Perhaps if that was the only objection, I may not have non-suited the petitioners on the ground of delay. But it is a fact that the petitioners were aware of Exts.P12 & P19 when the W.A. No.1839/2003 was being heard by a Division Bench of this Court, which was dismissed by Ext.P11 judgment dated 23.10.2008. The W.P.(C)No.34292 of 2009 **-5-** petitioners have not chosen to bring to the attention of the Division Bench that pending the writ appeal, the KFC had initiated proceedings under Section 29 against the very same property. It is not disputed before me that the petitioners are guarantors for due repayment of loan amounts due to the principal debtors who have defaulted payment of the loan amounts. It is also not disputed that the mortgaged properties and other properties of the principal debtors have been sold and still the entire amounts due could not be realised. Therefore the KFC is entitled to proceed against the properties of the petitioners under either of the two proceedings. In the above circumstances, I am not inclined to exercise my discretionary jurisdiction in favour of the petitioners under Article 226 of the Constitution of India. Accordingly, the writ petition is dismissed. Sd/S. SIRI JAGAN JUDGE //True copy// P.A. TO JUDGE shg/