P. P. Ashraf v. Special Sale Officer, Calicut City Co-operative Bank & Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN** **TUESDAY ,THE 22ND DAY OF JANUARY 2019 / 2ND MAGHA, 1940** ## **WP(C).No. 38467 of 2018** ## **PETITIONER :** **P.P. ASHRAF, AGED 54 YEARS S/O. ABDULKHADAN, THOTTUNGAL HOUSE, 13/175, CHERUVANNUR, KOZHIKODE DISTRICT - 673 015** **BY ADVS. SRI.K.M.FIROZ SMT.M.SHAJNA** ## **RESPONDENTS:** - **1 THE SPECIAL SALE OFFICER,(CALICUT CITY CO-OPERATIVE BANK), OFFICE OF THE ASSISTANT REGISTRAR (GENERAL) OF CO-OPERATIVE SOCIETIES, KOZHIKODE - 673 001** - **2 THE ASSISTANT REGISTRAR (GENERAL) OF CO-OPERATIVE SOCIETIES, DEPARTMENT OF CO-OPERATION, OFFICE OF THE ASSISTANT REGISTRAR (GENERAL) OF CO-OPERATIVE SOCIETIES, KOZHIKDOE, PIN-673001.** - **3 JOINT REGISTRAR OF CO-OPERATIVE SOCIETY (GENERAL), DEPARTMENT OF CO-OPERATION, OFFICE OF THE ASSISTANT REGISTRAR (GENERAL) OF CO-OPERATIVE SOCIETIES, KOZHIKODE, PIN-673001.** - **4 STATE OF KERALA, REP.BY ITS SECRETARY, DEPARTMENT OF CO-OPERATION, SECRETARIAT, THIRUVANANTHAPURAM, PIN695014.** - **5 CALICUT CITY CO-OPERATIVE BANK, KOZHIKODE, CHALAPPURAM POST, KOZHIKODE, PIN-673002, REPRESENTED BY ITS SECRETARY.** - **BY ADVS. SRI.B.S.SWATHY KUMAR SMT.ANITHA RAVINDRAN SRI K.P.HARISH, SENIOR GOVERNMENT PLEADER** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 22.01.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C).No. 38467 of 2018** **2** ## **JUDGMENT** The petitioner, who availed a loan for Rs.45 lakhs from the 5[th] respondent Bank on 18.06.2015, vide loan Account No.010012000570, for a period of 60 months, has filed this writ petition under Article 226 of the Constitution of India, seeking a writ of certiorari to quash Ext.P1 award dated 21.08.2017 in A.R.C.No.3561 of 2017 of the 3[rd] respondent Arbitrator and Ext.P2 notice dated nil and Ext.P3 sale notice dated 26.10.2018 issued by the 1[st] respondent Special Sale Officer; and for a declaration that the 2[nd] respondent is not entitled to auction the petitioner's property as per Ext.P3. The petitioner has also sought an alternative relief directing the respondents to permit him to pay off the alleged dues covered by Exts.P1 to P3 in instalments. 2. In paragraph No.2 of the writ petition it is averred that though the petitioner availed a loan for Rs.45 lakhs from the 5[th] respondent **WP(C).No. 38467 of 2018** **3** Bank on 18.6.2015, due to acute financial difficulties he could not repay the instalments as stipulated, in time. In ground No.L of the writ petition, the petitioner has stated that without prejudice to the legal contentions, he is prepared to clear the overdues in monthly instalments, in order to save his property. 3. On 27.11.2018, when this writ petition came up for admission, the learned Senior Government Pleader took notice on admission for respondents 2 to 4 and urgent notice on admission by speed post was ordered to respondents 1 and 5. This Court has granted an interim stay of recovery proceedings pursuant to Ext.P3 sale notice dated 26.10.2018 demanding payment of Rs.68,74,435/- for a period of one month on condition that the petitioner deposits Rs.15 lakhs with the 5[th] respondent Bank within a period of two weeks. 4. A counter affidavit dated 13.01.2019 has been filed by the 5[th] respondent Bank, opposing **WP(C).No. 38467 of 2018** **4** the reliefs sought for in this writ petition. 5. Heard the learned counsel for the petitioner, the learned Senior Government Pleader appearing for respondents 2 to 4 and also the learned counsel for the 5[th] respondent Bank. 6. The learned counsel for the 5[th] respondent Bank would point out that despite the order of this Court dated 27.11.2018, the petitioner has not remitted a sum of Rs.15 lakhs out of Rs.68,74,435/- demanded in Ext.P3 sale notice and that, the petitioner has not made any repayment whatsoever after availing the loan for Rs.45 lakhs from the Bank on 18.6.2015. 7. During the course of arguments, on a specific query made by this Court, the learned counsel for the petitioner would submit that the petitioner is not disputing the fact that he has not made any repayment whatsoever, after availing the loan for Rs.45 lakhs from the 5th respondent Bank on 18.6.2015. The learned **WP(C).No. 38467 of 2018** **5** counsel would submit further that the petitioner is unable to raise funds to comply with the conditional order passed by this court on 27.11.2018. 8. In _**Prestige Lights Limited v. State**_ _**Bank of India [(2007) 8 SCC 449]**_ the Apex Court reiterated that a prerogative remedy is not a matter of course. Therefore, in exercising extraordinary power, a writ court will indeed bear in mind the conduct of the party who is invoking such jurisdiction. If the applicant does not disclose full facts or suppresses relevant materials or is otherwise guilty of misleading the court, the court may dismiss the action without adjudicating the matter. The rule has been evolved in larger public interest to deter unscrupulous litigants from abusing the process of court by deceiving it. The very basis of the writ jurisdiction rests in disclosure of true, complete and correct facts. If the material facts are not candidly stated or are **WP(C).No. 38467 of 2018** **6** suppressed or are distorted, the very functioning of the writ courts would become impossible. 9. In _**Prestige Lights' case (supra)**_ the Apex Court held further that, under Article 226 of the Constitution of India, the High Court is exercising discretionary and extraordinary jurisdiction. Over and above, a Court of Law is also a Court of Equity. It is, therefore, of utmost necessity that when a party approaches a High Court, he must place all the facts before the Court without any reservation. If there is suppression of material facts on the part of the applicant or twisted facts have been placed before the court, the writ court may refuse to entertain the petition and dismiss it without entering into merits of the matter. Paragraphs 33 and 34 of the said judgment read thus: “33. It is thus clear that though the appellant-Company had approached the High Court under Article 226 of the Constitution, it had not candidly stated all the facts to the Court. The High **WP(C).No. 38467 of 2018** **7** Court is exercising discretionary and extraordinary jurisdiction under Article 226 of the Constitution. Over and above, a Court of Law is also a Court of Equity. It is, therefore, of utmost necessity that when a party approaches a High Court, he must place all the facts before the Court without any reservation. If there is suppression of material facts on the part of the applicant or twisted facts have been placed before the Court, the Writ Court may refuse to entertain the petition and dismiss it without entering into merits of the matter. 34. The object underlying the above principle has been succinctly stated by Scrutton, L.J., in _**R v. Kensington Income Tax Commissioners, [(1917) 1 KB 486 : 86 LJ KB 257 : 116 LT 136 (CA)]**_ , in the following words: "It has been for many years the rule of the Court, and one which it is of the greatest importance to maintain, that when an applicant comes to the Court to obtain relief on an ex parte statement he should made a full and fair disclosure of all the material facts - facts, not law. **WP(C).No. 38467 of 2018** **8** He must not misstate the law if he can help it - _the court is supposed to know the law. But it knows nothing about the facts_ , and the applicant must state fully and fairly the facts, and the penalty by which the Court enforces that obligation is that if it finds out that the facts have not been fully and fairly stated to it, the Court will set aside, any action which it has taken on the faith of the imperfect statement." (Emphasis supplied) 10. It is well settled that, a litigant who invokes the extraordinary jurisdiction of this Court under Article 226 of the Constitution must come with clean hands and clean objects. The judicial proceedings are sacrosanct, and no person would be allowed to abuse the judicial process, particularly, in public law remedy. In writ proceedings, the court places implicit faith on the parties and their pleadings, as it does not indulge in any fact finding or roving enquiry of what has been asserted. Since Article **WP(C).No. 38467 of 2018** **9** 226 of the Constitution of India espouses equity jurisprudence, a litigant who has approached the Court with unclean hands, without disclosing full facts, is not entitled for any reliefs. 11. In _**Dhananjay Sharma v. State of Haryana and others [(1995) 3 SCC 757]**_ the Apex Court held that filing of false affidavit, or making false statement on oath in courts aims at striking a blow at the Rule of Law and no court can ignore such conduct which has the tendency to shake public confidence in the judicial institutions, because the very structure of an ordered life is put at stake. It would be a great public disaster if the fountain of justice is allowed to be poisoned by anyone resorting to filing of false affidavits or giving of false statements and fabricating false evidence in a court of law. 12. In _**Muthu Karuppan, Commissioner of Police, Chennai v. Parithi Ilamvazhuthi and another [(2011) 5 SCC 496]**_ , the Apex Court **WP(C).No. 38467 of 2018** **10** expressed the view that filing of a false affidavit should be effectively curbed with a strong hand. In _**Sciemed Overseas Inc. v. BOC India Limited and others (2016) 3 SCC 70]**_ , the Apex Court held that the observations in Muthu Karuppan's case (cited supra) was made in the context of contempt of court proceedings, the view expressed must be generally endorsed to preserve the purity of judicial proceedings. 13. In the instant case, the petitioner, after availing the loan for Rs.45 lakhs from the 5[th] respondent on 18.6.2015, has not made even a single repayment. The fact that he is a chronic defaulter is not disclosed in this writ petition. When the petitioner is seeking discretionary reliefs under Article 226 of the Constitution of India, he should have approached this Court with clean hands, disclosing the true facts. 14. The petitioner filed this writ petition on 26.11.2018 when sale was scheduled to be held **WP(C).No. 38467 of 2018** **11** on 29.11.2018 in terms of Ext.P3 sale notice dated 26.10.2018 issued by the 1[st] respondent Special Sale Officer. On 27.11.2018, this Court granted an interim order of stay of the recovery proceedings pursuant to Ext.P3 sale notice, for a period of one month, on condition of the petitioner depositing a sum of Rs.15 lakhs with the 5[th] respondent Bank, within a period of two weeks. The petitioner has not complied with the condition stipulated in the said order, within the aforesaid period. He has also not chosen to file an application seeking extension of time, before the expiry of the time limit stipulated in the order dated 27.11.2018, after remitting atleast a portion of that amount. The conduct of the petitioner would make it explicitly clear that this writ petition is nothing but an attempt made by the petitioner to protract the recovery proceedings initiated by the 5[th] respondent Bank, based on Ext.P1 award passed by the 3[rd ] respondent Arbitrator. **WP(C).No. 38467 of 2018** **12** 15. One of the reliefs sought for in this writ petition is an order to set aside Ext.P1 award. Ext.P1 award is one passed by the 3[rd] respondent Arbitrator in exercise of his powers under Section 70 of the Kerala Co-operative Societies Act, 1969, in A.R.C.No.3561 of 2017 filed by the 5[th] respondent Bank invoking Section 69 of the said Act. The award passed by the Arbitrator can be challenged before the Kerala Co-operative Tribunal by filing an appeal under Section 82(1)(e) of the Act, within the time limit specified therein. Admittedly, the petitioner has not filed any such appeal. If the said award is an ex parte award, the petitioner has the option to file an application before the 3[rd] respondent Arbitrator to set aside the same, as held by this Court in _**Rema Devi and others v. Joint Registrar (General) of Co-operative Societies, Ernakulam and another [2016 (3) KHC 645]**_ , wherein it was held that, the Arbitrator has the power to set aside an ex-parte award and **WP(C).No. 38467 of 2018** **13** such a power is inherent in the exercise of the jurisdiction by a quasi judicial body. Therefore, the petitioner cannot invoke the writ jurisdiction of this Court under Article 226 of the Constitution of India to challenge Ext.P1 award. 16. When Ext.P1 award has already been passed by the 3[rd] respondent Arbitrator under Section 70 of the Act, the petitioner, who is the borrower, cannot seek regularisation of the loan account by payment of the overdues and as such, he cannot be permitted to pay the overdues in monthly instalments. 17. Learned counsel for the 5[th] respondent Bank would submit that on account of the interim order granted by this Court on 27.11.2018, the sale which was scheduled to be held on 29.11.2018, in terms of Ext.P3 sale notice, stands adjourned. The learned counsel would submit that respondents 1 and 5 shall proceed with sale of the property by issuing a fresh **WP(C).No. 38467 of 2018** **14** sale notice, in accordance with law, in case the petitioner is not clearing the entire dues covered by Ext.P1 award. 18. Having considered the submissions made by the learned counsel on both sides, with reference to the pleadings and materials on record, and also the law laid down in the decisions referred to supra, conclusion is irresistible that the petitioner, who secured an interim order from this Court by suppressing material facts is not entitled for any discretionary relief, in exercise of the writ jurisdiction of this Court under Article 226 of the Constitution of India. 19. In the result, this writ petition is dismissed imposing a cost of Rs.25,000/- (Rupees Twenty Five Thousand only) payable by the petitioner to the Chief Minister's Distress Relief Fund, to provide relief to flood victims in Kerala. The petitioner shall remit the said amount in the Chief Minister's Distress Relief **WP(C).No. 38467 of 2018** **15** Fund, within three weeks from the date of receipt of a certified copy of this judgment. Failing which, the State Government shall recover the said amount by initiating revenue recovery proceedings against the petitioner. The remittance/recovery of Rs.25,000/- (Rupees Twenty Five Thousand only) as cost by/from the petitioner shall be brought to the notice of this Court by way of a memo filed by the learned Senior Government Pleader. ## **Sd/-** ## **ANIL K.NARENDRAN,JUDGE** AV/23/1 **WP(C).No. 38467 of 2018** **16** ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 A TRUE COPY OF THE AWARD DATED 21/8/2017 IN ARC NO. 3561/2017 ISSUED BY THE THIRD RESPONDENT.** **EXHIBIT P2 TRUE COPY OF THE LETTER ISSUED BY THE 1ST RESPONDENT SPECIAL SALE OFFICER TO THE PETITIONER IN EP. NO. 1009/2018** **EXHIBIT P3 TRUE COPY OF THE AUCTION SALE NOTICE DATED 26/10/2018 ISSUED BY THE FIRST RESPONDENT TO THE PETITIONER (EP NO.1009/2018).** ## **RESPONDENTS' EXHIBTIS :** **EXHIBIT R5(A) TRUE COPY OF THE NOTICE DATED 30-62017 ISSUED BY THE 3RD RESPONDENT** **EXHIBIT R5(B) TRUE COPY OF THE STATEMENT GIVEN BY THE PETITIONER BEFORE THE ARBITRATOR DATED 20-7-2017**