Prakash K. George & Mini Prakash v. The South Indian Bank Ltd & The Authorized Officer, The South Indian Bank Ltd

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE S.SIRI JAGAN** **SATURDAY, THE 3RD DECEMBER 2011 / 12TH AGRAHAYANA 1933** **WP(C).No. 31692 of 2011(J)** **----------------------------------------** ## **PETITIONER(S):** **------------------------** **1. PRAKASH K.GEORGE, S/O.LATE KURIEN GEORGE,INCHATHANAM HOUSE, KUMBAZHA P.O.,PATHANAMTHITTA DIST, PIN-689 653** ## **2. MINI PRAKASH,** **W/O.PRAKASH GEORGE, INCHATHANAM HOUSE, KUMBAZHA P.O.,PATHANAMTHITTA DIST- PIN-689 653** **BY ADV. SRI.V.PHILIP MATHEW** ## **RESPONDENT(S):** **--------------------------** **1. THE SOUTH INDIAN BANK LTD, OMALLOOR BRANCH,PATHANAMTHITTA DISTRICT REP.BY ITS MANAGER,PIN-689 647** **2. THE AUTHORIZED OFFICER, THE SOUTH INDIAN BANK LTD, REGIONAL OFFICE, 26/254/257,KAKKANAT APARTMENTS, ST.PETERS JUNCTION, PATHANAMTHITTA-689 645** **R1 & R2 BY ADV.SRI.K.K.JOHN,SC** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03/12/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **sts** ## **WP(C)NO.31692/2011** ## **APPENDIX** ## **PETITIONER(S) EXHIBITS** **EXT.P1:COPY OF THE CHALAN DTD 5/3/2011 EVIDENCING PAYMENT OF RS.15,000/-** - **EXT.P2:COPY OF THE DEMAND NOTICE DTD 15/3/2011 PUBLISHED BY THE 2ND DEFENDANT IN MALAYALA MANORAMA DAILY PUBLISHED ON 16/3/2011** - **EXT.P3:COPY OF THE REPRESENTATION DTD 28/6/2011** - **EXT.P4:COPY OF THE REPLY DTD 19/7/2011 ISSUED BY THE CHIEF MANAGER OF SOUTH INDIAN BANK** - **EXT.P5:COPY OF THE POSSESSION NOTICE DTD 9/11/2011 ISSUED BY THE 2ND DEFENDANT TO THE APPLICANTS.** ## **RESPONDENTS' EXHIBITS :** ## **NIL** ## **/TRUE COPY/** ## **P.A.TO.JUDGE** **sts** S.SIRI JAGAN, J. ================== W.P.(C).No. 31692 of 2011 ================== Dated this the 3[rd] day of December, 2011 ## **J U D G M E N T** This writ petition is filed by defaulters of repayment of loan amounts due from them to the South Indian Bank Ltd., the 1[st] respondent herein. The South Indian Bank Ltd. issued Ext.P5 notice to the petitioners expressly stating the same to be one issued under Section 13 (4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, demanding the petitioners to hand over possession of the secured assets to the bank. The petitioners filed an application under Section 17 of the Act challenging Ext.P5. The Debts Recovery Tribunal heard the matter on the maintainability of the application. The Tribunal directed return of the application to the petitioners on the ground that the same is premature and directed that the petitioners can approach the Debts Recovery Tribunal again as and when any action is taken for taking possession of the secured assets under Section 13 (4). It is under the above circumstances, the petitioners have filed this writ petition seeking the following reliefs: - “i. Issue appropriate writ or order directing the Debt Recovery Tribunal, Ernakulam to accept the securitization application/ appeal (ID No.13942/11) filed by the petitioners and to consider the same on merits. - ii. Declare that Exhibit P5 will constitute a measure under section 13(4) of the SARFESI Act for filing an application/appeal under w.p.c.31692/11 - : 2 :- section 17 of the SARFESI Act. - iii. Issue a writ of mandamus or appropriate writ, order or direction commanding respondents to keep the entire securitization proceedings initiated against the petitioners (including Exhibit P5) in abeyance till petitioners avail the statutory remedy under section 17 of the SARFESI Act.” 2. I had earlier, in the decision of _**Sami.K**_ v. _**Branch**_ _**Manager, Bank of India and others**_ , 2011 (3) KHC 414, rendered a decision on the question of law relating to the stage at which, a party aggrieved by proceedings under the Act can approach the Debts Recovery Tribunal. Relying on the Supreme Court decision on the subject, I have stated therein that the aggrieved person can file an application under Section 17 against any measure under Section 13 (4) of the Act. The Tribunal used to take the stand that taking a notional possession would not constitute a measure under Section 13 (4) and, therefore, a section 17 petition would be only after the financial institution takes actual possession of the land. I had held that such stand also is incorrect. In view of the stand of the Debts Recovery Tribunal in this case, what has to be decided in this case is as to whether Ext.P5 is a measure under Section 13 (4) of the Act. Ext.P5 reads thus: “Possession of the secured assets charged to the bank under Section 13(4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. 1. Please refer to Notice dated 26.02.2011 of the undesigned demanding from you which within 60 days, a total sum of ` 2,15,795/(Rupees Two Lacs Fifteen Thousand Seven Hundred and Ninety Five - : 3 :- w.p.c.31692/11 Only) along with interest in respect of the credit facility allowed in the account of Mr.Prakash K.Geroge (No. 1 among you) as specified in the said Notice and intimating you that in case of default of payment Bank shall enforce the secured assets without the intervention of the court by taking recourse to one or more of the measures under Section 13 (4) of the said Act, including taking possession of the secured assets charged to the Bank to realise the bank's dues. 2. After the issue of the said notice, based on your several promises and assurance though adequate time was given to you for closure of the account, you have failed to pay the balance amount and clear the dues. 3. The undersigned being the authorised officer of The South Indian Bank Ltd., under the said Act in exercise of the powers conferred under the said Act hereby demand from you to hand over the possession of the following secured asset, to the undersigned on the following date.” 3. I have obtained a report from the Debts Recovery Tribunal, as to under what circumstances, the Tribunal refused to entertain the application filed by the petitioners. He has in that report stated that when the matter was taken up for hearing, the bank submitted that Ext.P5 is not a measure under Section 13(4) of the Act since they have not invoked Section 14 and it is only an intimation by the bank to the borrowers that they intend to take possession. The Tribunal is stated to have accepted the same. He has also quoted proceedings recorded in the file, in the report which read thus: “24.11.2011 Mentioned. Heard learned Counsel who presented the SA, when the learned Counsel for defendant also present. Learned Counsel for defendant submitted as of date the bank has not invoked S.14 of the SARFESI Act. Hence, there is no need for any apprehension towards threat of dispossession. As such, the SA is only premature. Registry shall return the same. Needless to state as and when further cause of action arises, the Applicant is at liberty to approach the Tribunal as per law.” He would also take the stand that his decision is in accordance with my w.p.c.31692/11 - : 4 :- decision in _**Sami's case**_ (supra). I do not agree with the Tribunal. The Tribunal is not expected to decide the question solely on the basis of contentions of the parties or on the basis of the assurance given by the financial institution. If the Tribunal was to decide matters on the basis of contention of one of the parties in this case, the Tribunal itself was not necessary. Whether a measure is under Section 13(4) of the Act has to be decided on the basis of the action taken. The action taken herein is admittedly as per Ext.P5. If Ext.P5 is a measure under Section 13(4), certainly the application filed by the petitioners is entertainable. By the very nature of the provisions of the Act, it is evidently a very harsh legislation. Therefore, at least in the matter of seeking remedies against the action under the same by the aggrieved person, a liberal interpretation is called for. I am of opinion that Ext.P5 does not give room for any doubt whatsoever as to the nature of the action taken thereby. It admits of no doubt that it is a measure under Section 13(4) of the Act. It has been expressly stated to be so demanding the petitioners to hand over possession of the secured asset, which undoubtedly is a measure under Section 13(4) of the Act and, therefore, I am satisfied that the action of the Tribunal in not entertaining the application against Ext.P5 is clearly against the provisions of the Act. A measure under Section 13(4) does not start only when the financial institution files an application before the CJM w.p.c.31692/11 - : 5 :- under Section 14 of the Act or actually takes possession. Demanding handing over possession forms part of the action of taking possession just like taking notional possession. Even without filing such an application the Bank can take possession under Section 13(4). It is only when there is obstruction to taking possession, the financial institution is obliged to approach the CJM under Section 14. Therefore the very act of the financial institution in directing handing over possession of the property amounts to a measure under Section 13(4), against which the aggrieved party can file an application under Section 17 of the Act. In such circumstances the Debts Recovery Tribunal went wrong in refusing to entertain the petitioner's application under Section 17. Accordingly, this writ petition is disposed of with a direction to the Tribunal to entertain the application filed by the petitioners in accordance with Section 17 of the Act. If the application has already been returned to the petitioners, the petitioners shall resubmit the same and the Tribunal shall entertain the same. If it has not been returned, the Tribunal shall entertain the same as it is. The writ petition is disposed of as above. sdk+ Sd/S.SIRI JAGAN, JUDGE P.A. to Judge w.p.c.31692/11 - : 6 :-