Prakash Kumar C and Madhura Meenakshi A.V v The Authorized Officer, South Indian Bank Ltd & South Indian Bank Ltd represented by its Branch Manager

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE N.NAGARESH** **THURSDAY, THE 11[TH] DAY OF JANUARY 2024/21ST POUSHA, 1945** **OP (DRT) NO. 477 OF 2023** **AGAINST THE ORDER IN IA.2627/2023 IN SA.418/2023 OF DEBT RECOVERY TRIBUNAL-2, ERNAKULAM** ## **PETITIONERS:** - **1 PRAKASH KUMAR C AGED 60 YEARS CHITIATH NANDAVANAM, CHENATHUNADU, CHALAKKUDY P.O., THRISSUR, PIN - 680307** - **2 MADHURA MEENAKSHI A.V AGED 55 YEARS CHITIATH NANDAVANAM, CHENATHUNADU, CHALAKKUDY P.O., THRISSUR, PIN – 680307** **BY ADVS. S.B.PREMACHANDRA PRABHU K.B.RAJESH** ## **RESPONDENTS:** - **1 THE AUTHORIZED OFFICER SOUTH INDIAN BANK LTD., REGIONAL OFFICE, PLATINUM JUBILEE BUILDING, CIVIL LINE ROAD, AYYANTHOLE P.O, THRISSUR, PIN - 680003** - **2 SOUTH INDIAN BANK LTD REPRESENTED BY ITS BRANCH MANAGER, MISSION QUARTERS BRANCH, OPP. ALL SAINTS CHURCH, MAIN ROAD, MISSION QUARTERS, THRISSUR CENTRAL P.O, THRISSUR, PIN – 680001** ## **BY ADV C. AJITH KUMAR** **THIS OP (DEBT RECOVERY TRIBUNAL) HAVING COME UP FOR ADMISSION ON 11.01.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** O.P.(DRT) No.477/2023 : 2 : ## **CR** ## **N. NAGARESH, J.** ````````````````````````````````````````````````````````````` ## O.P.(DRT) No.477 of 2023 ````````````````````````````````````````````````````````````` _Dated this the 11[th] day of January, 2024_ ## **J U D G M E N T** ~ ~ ~ ~ ~ ~ ~ ~ ~ The petitioners are before this Court aggrieved by the arbitrary and hasty recovery proceedings pursued by the respondents under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. 2. The petitioners state that they have availed financial assistance from the 2[nd] respondent-Bank by way of KCC Crop Finance providing security of 128.75 Acres of rubber plantation in Mankada Village. Due to unprecedented O.P.(DRT) No.477/2023 : 3 : floods occurred in the year 2018, the property in Mankada Village was completely damaged and resultantly affected the crops. The petitioners could not maintain the loan account properly. When the respondents were informed about the difficulties of the petitioners, the 2[nd] respondent split the financial assistance under two heads namely KCC Crop Finance and Agricultural short term loan. 3. The business could not be revived as expected. On the failure on the part of the petitioners to maintain the loan accounts, those were declared as NPA and the petitioners were issued with notice under Section 13(2) of the Securitisation Act. Though the petitioners remitted substantial amount during 13.04.2022 to 27.09.2022, the Bank issued Ext.P4 possession notice. The petitioners sought time and instalment facility to clear the debt. The 1[st] respondent as per Ext.P7 letter rejected the request of the petitioners. 4. The petitioners therefore filed SA No.418/2023 in the Debts Recovery Tribunal-II, Ernakulam. A stay petition IA No.2627/2023 was also filed. However, to the utter surprise O.P.(DRT) No.477/2023 : 4 : of the petitioners, the respondents initiated further proceedings under the Securitisation Act invoking Section 14 and obtained an ex-parte order appointing Advocate Commissioner to take physical possession of the secured assets provided by the petitioners. 5. The petitioners immediately filed IA No.3263/2023 for amendment and IA No.3262/2023 seeking stay of dispossession. The afore applications submitted by the petitioners were not numbered. Though the petitioners insisted for an interim order, when the case was posted on 03.10.2023, the Debts Recovery Tribunal simply adjourned the matter to 12.10.2023. 6. Aggrieved by the proceedings of the Tribunal, the petitioners filed OP(DRT) No.409/2023 in this Court. This Court stayed the proceedings under the Securitisation Act for a period of one month on condition that the petitioners remit ₹25 lakhs within one month. The Debts Recovery Tribunal was directed to consider and dispose of Ext.P9 IA within a period of one month. The petitioners deposited ₹25 lakhs on O.P.(DRT) No.477/2023 : 5 : ## 25.10.2023. 7. The Tribunal, however, on 07.11.2023, heard Ext.P9 and P14 interlocutory applications and dismissed the same as per Ext.P16 order. The petitioners state that the property sought to be taken possession of and sold by the Bank has a residential building in it. The said property and building is also sought to be taken possession of and auctioned. The DRT, however, came to an erroneous conclusion that a residential building is in existence over the land for which the defendants have not proceeded. The findings of the DRT in Ext.P16 is clearly erroneous, contended the counsel for the petitioners. Hence, the petitioners are before this Court. 8. The respondents entered appearance through Standing Counsel and staunchly resisted the writ petition. The respondents submitted that the petitioners have an efficacious alternate remedy and when there is an alternate remedy available, this Court shall refrain from exercising its jurisdiction under Article 227 of the Constitution of India. The O.P.(DRT) No.477/2023 : 6 : respondents relied on the judgment of the Apex Court in _**Rajkumar Shivahare v. Directorate of Enforcement** [(2010) 4 SCC 772]_ in support of their contention. 9. The respondents further urged that the petitioners are aggrieved by the manner in which Ext.P16 order came to be passed as their contentions were not properly addressed by the Tribunal. Even in such cases, the proper remedy is to challenge Ext.P16 order on merits before the Appellate Forum. This Court cannot sit in appeal or in Ext.P16 order. 10. The respondents further argued that the petitioners could not bring out any valid grounds, seeking indulgence of this Court under Article 227 of the Constitution of India for invoking its extraordinary jurisdiction. The OP(DRT) filed by the petitioners is therefore liable to be dismissed. 11. I have heard the learned counsel for the petitioners and the learned Standing Counsel appearing for the respondent-Bank. 12. It may be noted that the liability of the petitioners, according to the respondent, exceeds ₹8 Crores. The O.P.(DRT) No.477/2023 : 7 : ## petitioners have made the following remittances in the year 2022: |Date|Amount| |---|---| |13.04.2022|₹25,50,000/-| |16.04.2022|₹5,10,000/-| |26.09.2022|₹5,00,000/-| |26.09.2022|₹15,00,000/-| |27.09.2022|₹3,50,000/-| |27.09.2022|₹7,00,000/-| |27.09.2022|₹3,00,000/-| |27.09.2022|₹1,50,000/-| |27.09.2022|₹50,000/-| |27.09.2022|₹5,00,000/-| |27.09.2022|₹15,00,000/-| |27.09.2022|₹5,00,000/-| In OP(DRT) No.409/2023, this Court directed the petitioners to remit an amount of ₹25 lakhs within a period of one month. The petitioners have remitted the said amount on 25.10.2023. 13. When this OP(DRT) came up for hearing on 16.11.2023, this Court passed a conditional interim order directing the petitioners to remit an amount of ₹30 lakhs within a period of one month. The petitioners have remitted ₹30 lakhs on 11.12.2023. On 21.12.2023, this Court further directed the petitioners to remit a further amount of ₹30 lakhs O.P.(DRT) No.477/2023 : 8 : on or before 30.12.2023. The petitioners remitted ₹18 lakhs by instalments and have filed IA No.1/2024 seeking enlargement of time to pay the balance amount of ₹12 lakhs. 14. Be that as it may, the grievance of the petitioners is that the Debts Recovery Tribunal has passed Ext.P16 order without proper application of mind and on a misconception of facts. The precise argument is that the property sought to be taken possession of through Section 14 proceedings has a residential building in it and members of the petitioners' family are residing there. The Debts Recovery Tribunal has refused to grant interim relief to the petitioners on an erroneous assumption that the Bank is not proceeding against the building in the secured property. 15. In Ext.P16 order, the Tribunal has observed as follows: “Due to non-repayment of huge amount, the financial institution must have sustained some loss due to non-circulation of the public money. In such premises, the balance of convenience does not lien in favour of the applicants. Further, from AnnexureB2, it appears that a residential building is also in existence over the said land for which the defendants have not proceeded. In such premises, the applicants would not face any irreparable loss in O.P.(DRT) No.477/2023 : 9 : case of physical possession of the secured asset is taken during the pendency of the SA.” Therefore, it is clear that the DRT was not inclined to grant interim relief to the petitioners on an assumption that there is no proceedings against the residential building. 16. Ext.P4 possession notice issued by the Bank would show that the property sought to be taken possession of is all that part and parcel of land admeasuring 29.95 Ares along with residential building having a plinth area of 3500 sq. ft. (approx.) within Chalakudy Municipality. In Ext.P8 SA, in paragraph 51, the petitioners had stated that the property contains a residential house confined to an extent of about 4 Cents. 17. In paragraph 3 of Ext.P16 order, the DRT has observed that the applicants have created Annexure-B1 document stating existence of a residential building having plinth area of 3500 sq. ft. over the property. Nevertheless, interim relief was declined by Ext.P16 on an assumption that the Bank is not proceeding against the residential building. It O.P.(DRT) No.477/2023 : 10 : is therefore evident that the Tribunal has misconceived a material fact while declining relief to the petitioners. 18. While Banks are taking over possession of secured assets mortgaged by the borrowers and while judicial forums including DRT consider challenge against taking over of possession of secured assets, the nature of the asset/property gains importance. The courts and Tribunals will be less inclined to interfere with Section 14 proceedings if the property sought to be taken over is uninhabited and without any human activity. The Courts/Tribunals will be more cautious in their approach if the property sought to be taken possession of is a running industry or contain inhabited residential buildings. Omission to consider such an aspect or a wrong appreciation of factual aspect in that regard, would render the order of the Tribunal perverse. In such circumstances, this Court will indeed be justified in interfering with the orders of the Tribunal granting or refusing reliefs under Article 227 of the Constitution of India. O.P.(DRT) No.477/2023 : 11 : 19. Ext.P16 order would clearly indicate that the Tribunal refused interlocutory orders in favour of the petitioners on an erroneous assumption that the residential property of the petitioners is not proceeded against. Even the respondents have no case that the residential building of the petitioners is not sought to be taken possession of. In the circumstances, Ext.P16 is liable to be interfered with. 20. Ext.P16 order of the Debts Recovery Tribunal-II, Ernakulam is therefore set aside. The Debts Recovery Tribunal-II, Ernakulam is directed to reconsider IA Nos.2627/2023 and 3262/2023 in SA No.418/2023 and pass orders afresh after giving opportunity of hearing to the parties. Dispossession of the petitioner from the residential premises shall stand deferred till the Tribunal reconsiders IA No.2627/2023 as directed above. OP(DRT) is disposed of as above. Sd/- **N. NAGARESH, JUDGE** aks/09.01.2024 O.P.(DRT) No.477/2023 : 12 : ## **APPENDIX OF OP (DRT) 477/2023** ## **PETITIONER'S EXHIBITS** **Exhibit. P1 TRUE COPY OF THE CERTIFICATE DATED 31.10.2019 ISSUED BY THE VILLAGE OFFICER, MANKADA VILLAGE Exhibit. P2 TRUE COPY OF THE NOTICE DATED 14.03.2023 ISSUED UNDER SECTION 13(2) OF THE SARFAESI ACT, 2002 Exhibit. P3 TRUE COPY OF THE LOAN ACCOUNT STATEMENT FROM 27.09.2017 TO 07.07.2023 Exhibit. P4 TRUE COPY OF THE POSSESSION NOTICE DATED 03.07.2023 ISSUED BY THE 1ST RESPONDENT Exhibit. P5 TRUE COPY OF THE SAID E-MAIL COMMUNICATION DATED 05.07.2023 Exhibit. P6 TRUE COPY OF THE REPRESENTATION DATED 11.07.2023 SUBMITTED BY THE PETITIONERS BEFORE THE 1ST RESPONDENT Exhibit. P7 TRUE COPY OF THE LETTER DATED 27.07.2023 ISSUED BY THE 1ST RESPONDENT Exhibit. P8 TRUE COPY OF THE S.A. NO. 418/2023 DATED 07.08.2023 BEFORE THE DEBT RECOVERY TRIBUNAL-II, ERNAKULAM ON 09.08.2023 (WITHOUT EXHIBITS) Exhibit. P9 TRUE COPY OF THE I.A. NO. 2627/2023 IN S.A. NO.418/2023 Exhibit. P10 TRUE COPY OF THE WRITTEN STATEMENT FILED BY THE BANK BEFORE THE TRIBUNAL ON 27.09.2023 (WITHOUT EXHIBITS) Exhibit. P10(a) TRUE COPY OF THE LETTER DATED 10.11.2017 (MARKED AS EXT.B1 ALONG WITH THE WRITTEN STATEMENT) CONFIRMING DEPOSIT OF TITLE DEEDS IN RESPECT OF 21.95 ARES SITUATED IN SY. NO. 604/2 OF KIZHAKKE CHALAKKUDY VILLAGE, CHALAKKUDY TALUK WITH BUILDING THEREIN** O.P.(DRT) No.477/2023 : 13 : **Exhibit. P10(b)** **Exhibit. P11** **TRUE COPY OF THE LETTER DATED 10.11.2017 CONFIRMING DEPOSIT OF TITLE DEEDS IN RESPECT OF 128.75 ACRESPLANTATION SITUATED IN RE. SY. NO. 64/1A OF MANKADA VILLAGE, PERUNTHALMANNA TALUK (WHICH WAS MARKED AS EXT.B2 ALONG WITH THE WRITTEN STATEMENT)** **TRUE COPY OF THE COUNTER AFFIDAVIT TO I.A. NO.2627/2023 IN S.A. NO.418/2023 DATED 27.09.2023** **Exhibit. P12 TRUE COPY OF THE NOTICE ISSUED BY THE ADVOCATE COMMISSIONER (MS. SANIA ALEX, ADVOCATE, TRICHUR) DATED 27.09.2023 Exhibit. P13 TRUE COPY OF IA NO. 3263/2023 SEEKING AMENDMENT OF THE S.A. NO. 418/2023 DATED 01.10.2023 Exhibit. P14 TRUE COPY OF THE IA NO. 3262/2023 SEEKING STAY OF THE DISPOSSESSION NOTICE ISSUED ADVOCATE COMMISSIONER DATED 01.10.2023** **Exhibit. P15 TRUE COPY OF THE JUDGMENT IN OP(DRT) NO. 409/2023 DATED 6.10.2023 OF THIS HON'BLE COURT Exhibit.P16 TRUE COPY OF THE PROCEEDINGS DATED 07.11.2023 OF THE DEBT RECOVERY TRIBUNAL II, ERNAKULAM**