Naveen Mathew Philip & Others v. South Indian Bank Ltd. & Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE N.NAGARESH** **MONDAY, THE 11[TH] DAY OF DECEMBER 2023/20TH AGRAHAYANA, 1945** **WP(C) NO. 29752 OF 2023** ## **PETITIONERS:** - **1 NAVEEN MATHEW PHILIP AGED 39 YEARS S/O. PHILIP MATHEW, PROPRIETOR M/S. PHILIP GRANO PRODUCTS, NOOROMAVU P.O., MALLAPPALLY WEST, PATHANAMTHITTA THEKKENEDUMPLAKKAL HOUSE, MALLAPPALLY WEST P.O., PATHANAMTHITTA, PIN - 689585** - **2 CLEA JOSE AGED 35 YEARS W/O. NAVEEN MATHEW PHILIP, THEKKENEDUMPLAKKAL HOUSE, MALLAPPALLY WEST P.O., PATHANAMTHITTA, PIN - 689585** - **3 MARY PHILIP AGED 64 YEARS W/O. PHILIP MATHEW, 11/165, THEKKENEDUMPLAKKAL HOUSE, MALLAPPALLY WEST P.O., PATHANAMTHITTA, PIN - 689585** - **4 M/S. PEEGE AGGREGATES PRIVATE LTD., REPRESENTED BY ITS MANAGING DIRECTOR NAVEEN MATHEW PHILIP, 11/165, THEKKENEDUMPLAKKAL HOUSE, MALLAPPALLY WEST P.O., PATHANAMTHITTA, PIN - 689585** - **5 M/S. NPM GRANITES PVT. LTD., REPRESENTED BY ITS MANAGING DIRECTOR NAVEEN MATHEW PHILIP, 11/165, THEKKENEDUMPLAKKAL HOUSE, MALLAPPALLY WEST P.O., PATHANAMTHITTA, PIN - 689585** W.P.(C) No.29752/2023 : 2 : - **6 M/S. P.G. ROCK AND CONCRETE PRODUCTS PVT. LTD., REPRESENTED BY ITS MANAGING DIRECTOR NAVEEN MATHEW PHILIP, 126/V, THEKKENEDUMPLAKKAL HOUSE, OPP. CMS LP SCHOOL, MALLAPPALLY WEST P.O., PATHANAMTHITTA, PIN – 689585** **BY ADVS. P.HARIDAS BIJU HARIHARAN SHIJIMOL M.MATHEW P.C.SHIJIN ROSHIN MARIAM JACOB RAJASREE T.R.** ## **RESPONDENTS:** - **1 M/S. SOUTH INDIAN BANK LTD., REPRESENTED BY ITS CHAIRMAN & MANAGING DIRECTOR REGISTERED OFFICE, SIB HOUSE, T.B. ROAD, MISSION QUARTERS, THRISSUR, PIN - 680001** - **2 THE REGIONAL MANAGER, M/S. SOUTH INDIAN BANK LTD 2ND FLOOR, TMJ COMPLEX, RAMANCHIRA, THIRUVALLA, PIN - 689107** - **3 THE MANAGER, M/S. SOUTH INDIAN BANK LTD MALLAPPALLY BRANCH, KARAKKAL BUILDING CENTRAL JUNCTION, MALLAPALLY-WEST P.O., PATHANAMTHITTA, PIN – 689585** **BY ADVS.** **SUNIL SHANKER VIDYA GANGADHARAN** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11.12.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C) No.29752/2023 : 3 : ## **N. NAGARESH, J.** ````````````````````````````````````````````````````````````` ## W.P.(C) No.29752 of 2023 ````````````````````````````````````````````````````````````` _Dated this the 11[th] day of December, 2023_ ## **J U D G M E N T** ~ ~ ~ ~ ~ ~ ~ ~ ~ The petitioners, aggrieved by the coercive steps taken by the 1[st] respondent-Bank against the petitioners, have approached this Court seeking to quash Exts.P12 and P14 and to command the respondent to treat all the loan accounts of the petitioners as regular and to issue formal proceedings regularising such loans. 2. The petitioners state that they are engaged in the business of mining of granite and producing stone aggregates. The business of the petitioners was developed installing new machinery by availing eight loans from the 1[st] respondent-Bank. A housing loan of ₹1,08,90,000/- was also availed on 27.06.2018. W.P.(C) No.29752/2023 : 4 : 3. The petitioners faced certain issues in getting the licences/clearances of their industrial unit. Consequently, they suffered setback and could not repay the loan instalments promptly. The respondents issued notice to the petitioners under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The petitioners requested the 1[st] respondent-Bank to grant some time by converting overdraft facility by a term loan. As the respondents were not willing, the petitioners filed W.P.(C) No.23940/2021 and this Court directed the respondents to consider the petitioners' request, as per Ext.P3 judgment. 4. However, the respondents proceeded and issued Ext.P4 notice under Section 13(4) of the Securitisation Act for taking over symbolic possession of the Secured assets. The petitioners therefore filed W.P.(C) No.30238/2021. The petitioners also filed W.P.(C) No.30450/2021 with reference to the demand of Kissan Credit Card loan arrears. W.P.(C) No.29752/2023 : 5 : 5. This Court granted interim stay on condition of the petitioners paying ₹20 lakhs and ₹2,50,000/-. In the said writ petitions, the respondents filed counter affidavit dated 19.01.2022 stating that the total due as on 18.01.2022 is ₹5,75,70,735.07 and the overdue is ₹1,48,09,420/-. The writ petitions were disposed of as per Ext.P6 judgment permitting the petitioner to remit the overdue in 20 monthly instalments. In W.A. No.1492/2022 and W.A. No.1497/2022, a Division Bench of this Court reduced the monthly instalments to 12. 6. The petitioners submit that they have been remitting the instalments regularly. Though the respondents filed special leave to appeal before the Hon’ble Apex Court, the respondents submitted before the Apex Court that the relief granted by the High Court may not be disturbed by pressing for reiteration of law. The Special Leave Petition was accordingly disposed of as per Ext.P9. According to the petitioner, they continued to pay monthly payments even thereafter. W.P.(C) No.29752/2023 : 6 : 7. The petitioners would submit that they have paid ₹4,69,80,019.67 between September, 2021 and August, 2023. Now, out of the eight loans, four loans have been closed. 8. The petitioners alleged that in spite of prompt payments made by them, the respondents issued Ext.P12 possession noticed dated 19.08.2023 invoking the Securitisation Act. Ext.P13 tender-cum-auction sale notice was also published. The petitioners state that they have cleared all the outstanding amounts except an amount of ₹17 lakhs. But, the respondents submitted that the overdue is ₹25,59,930/-. The petitioners are ready to clear the overdue amounts by payment in instalments. The respondents are, however, trying to sell off the residential property and industry of the petitioners. The approach of the petitioners is highly arbitrary, contended the petitioners. 9. The 3[rd] respondent filed a counter affidavit on behalf of respondents 1 to 3. The 3[rd] respondent submitted that the South Indian Bank Limited is not “State” for the W.P.(C) No.29752/2023 : 7 : purpose of writ jurisdiction. The relief sought for by the petitioners is not in relation to discharge of any public function. The respondents submitted that the petitioners failed to comply with the instalments granted by this Court. The amounts paid by the petitioners have been properly credited to the account. A total amount of ₹3,64,09,997.66 is outstanding in the credit facilities availed by the 1[st] petitioner for his proprietorship concern. An amount of ₹1,71,54,352.92 is outstanding in the credit facility availed by the 1[st] petitioner along with the 2[nd] petitioner. Admittedly, the petitioner has defaulted the repayments and hence the respondent-Bank proceeded with the securitisation measures. 10. The respondents further submitted that the OD limit of the petitioners has expired. The business unit is completely closed. The overdraft facility therefore cannot be renewed or regularised. The term of “KCC OD” has also expired. The writ petition is therefore devoid of any merit and it is liable to be dismissed. W.P.(C) No.29752/2023 : 8 : 11. The petitioners are before this Court aggrieved by certain loan transactions between the petitioners and the respondents. The 1[st] respondent-South Indian Bank Limited is not “State” for the purpose of exercise of jurisdiction under Article 226 of the Constitution of India. If the petitioners are aggrieved by any proceedings initiated by the 1[st] respondent-Bank invoking the Securitisation Act, the petitioners have to challenge the same before the Debts Recovery Tribunal invoking Section 17 of the Securitisation Act. 12. The respondents are lending amounts to its customers. The determination or recalling the loans and initiating recovery measures are commercial banking decision and is to be considered with paramount priority of protecting the interest of depositors. 13. Commercial decisions taken by a private Bank cannot be subject matter of judicial review in writ jurisdiction. The Hon’ble Apex Court in the judgment in Phoenix ARC Private Limited v. Viswabharati Vidya Mandir and others W.P.(C) No.29752/2023 : 9 : [Civil Appeal Nos.257-259 of 2022] has reiterated that staying of recovery measures under the Securitisation Act would have serious adverse impact on the financial health of the secured creditor /assignor. In the facts and circumstances of the case, I do not find any extraordinary circumstances in the case of the petitioners warranting interference by this Court in exercise of the powers under Article 226 of the Constitution of India. The writ petition is therefore dismissed. It is made clear that the petitioners will be at liberty to approach the Debts Recovery Tribunal or the 1[st] respondent-Bank for redressal of their grievances. Sd/- **N. NAGARESH, JUDGE** aks/07.12.2023 W.P.(C) No.29752/2023 : 10 : ## **APPENDIX OF WP(C) 29752/2023** ## **PETITIONER'S EXHIBITS** **Exhibit P1 TRUE COPY OF THE NOTICE DATED 12.08.2021 UNDER 13(2) OF THE SARFAESI ACT** **Exhibit P2 TRUE COPY OF THE REQUEST SUBMITTED BY THE PETITIONERS DATED 28.10.2021 Exhibit P3 TRUE COPY OF THE JUDGMENT IN WP(C) NO. 23940/2021 OF THIS HON'BLE COURT DATED 02.11.2021** - **Exhibit P4 TRUE COPY OF THE POSSESSION NOTICE DATED 20.12.2021 UNDER THE SARFAESI ACT** **Exhibit P5 TRUE COPY OF THE STATEMENT FILED BY THE COUNSEL FOR THE RESPONDENTS IN I.A.NO.1 OF 2022 IN WP(C) NO. 30238/2021 DATED 19.01.2022 BEFORE THIS HONORABLE HIGH COURT OF KERALA Exhibit P6 TRUE COPY OF THE COMMON JUDGEMENT IN WP(C) 30238/2021 AND WP(C) NO. 30450/2021 OF THIS HON'BLE COURT DATED 31.08.2021** **Exhibit P7 TRUE COPY OF THE COMMON JUDGMENT IN WA NO. 1492/2022 AND WA NO. 1497/2022 DATED 19.10.2022** **Exhibit P8 TRUE COPY OF THE ORDER IN I.A. NO. 1/2022 IN WA NO. 1492/2022 OF THIS HON'BLE COURT DATED 10.11.2022 Exhibit P9 TRUE COPY OF THE JUDGMENT IN SPECIAL LEAVE TO APPEAL (CIVIL) NO. 22021 AND 22022 OF 2022 OF THE HON'BLE SUPREME COURT DATED 17.04.2023 Exhibit P10 TRUE COPY OF THE AFFIDAVIT AND PETITION DATED 02.05.2023 AS IA.NOS. 1/2023,2/2023,3/2023 IN WA. NO. 1497/2022** W.P.(C) No.29752/2023 ## : 11 : |**Exhibit P11**|**TRUE COPY OF THE ACCOUNT WISE**| |---|---| ||**STATEMENTS PERIOD FROM 1-3-2023 TO**| ||**31.3.2023**| |**Exhibit P11(a)**|**TRUE COPY OF THE MONTHLY WISE FROM**| ||**SEPTEMBER, 2021 TO AUGUST, 2023**| |**Exhibit P11(b)**|**TRUE COPY OF THE YEAR WISE LOAN**| ||**REPAYMENT DETAILS FROM 1.9.2021 TO**| ||**23.8.2023**| |**Exhibit P12**|**TRUE COPY OF THE POSSESSION NOTICE**| ||**UNDER SARFAESI ACT DATED 19.08.2023**| |**Exhibit P13**|**TRUE COPY OF THE PHOTOGRAPH OF THE**| ||**PROPERTY**| |**Exhibit P14**|**TRUE COPY OF THE TENDER CUM AUCTION**| ||**SALE NOTICE DATED 19.08.2023**| |**Exhibit P15**|**TRUE COPY OF THE COVERING LETTER DATED**| ||**04.09.2023 SUBMITTED BY THE 1ST**| ||**PETITIONER BEFORE THE SENIOR MANAGER**| ||**OF THE SOUTH BANK, MALLAPPALLY BRANCH**| |**Exhibit P16**|**TRUE COPY OF THE SCREEN SHOT OF**| ||**WHATSAPP MESSAGE SENT BY THE 3RD**| ||**RESPONDENT DATED 04.09.2023**| |**Exhibit P17**|**TRUE COPY OF THE JUDGMENT IN**| ||**CONMT.PET.(C) NOS. 1150-1151/2023 IN**| ||**C.A. NOS. 2861-2862/2023 OF THE**| ||**HON'BLE APEX COURT DATED 27.09.2023**| |**Exhibit P18**|**TRUE COPY OF THE LETTER OF THE LEARNED**| ||**ADVOCATE COMMISSIONER APPOINTED BY THE**| ||**LEARNED A.C.J.M, SPECIAL COURT, AND**| ||**ERNAKULAM IN M.C.NO.700/2023 DATED**| ||**28.10.2023**| |**Exhibit P19**|**TRUE COPY OF THE E-MAILS SENT BY THE**| ||**RESPONDENTS TO THE 1ST PETITIONER**| ||**DATED 21.09.2023 AND 29.09.2023**| |**Exhibit P20**|**TRUE COPY OF THE LETTER DATED**| ||**30.10.2023 SUBMITTED BY THE 1ST**| ||**PETITIONER TO THE 3RD RESPONDENT**| |**Exhibit P21**|**TRUE COPY OF THE MAIL DATED 10.10.2023**| ||**SENT BY THE RESPONDENTS TO THE 1ST**| ||**PETITIONER**| |**Exhibit P22**|**TRUE COPY OF THE COVERING LETTER DATED**| ||**30.10.2023 SUBMITTED BY THE 1ST**| ||**PETITIONER TO THE 3RD RESPONDENT**| W.P.(C) No.29752/2023 : 12 : |**Exhibit P23**|**TRUE COPY OF THE E-MAIL DATED**| |---|---| ||**08.11.2023 SENT BY THE 3RD RESPONDENT**| ||**TO THE 1ST PETITIONER**| |**Exhibit P24**|**TRUE COPY OF REPLY SUBMITTED BY THE**| ||**1ST PETITIONER TO THE 3RD RESPONDENT**| ||**DATED 08.11.2023**|