Radha Surendran v. The Alappuzha District Co-operative Bank Ltd and The Authorized Officer, The Alappuzha District Co-operative Bank Ltd

IN THE HIGH COURT OF KERALA AT ERNAKULAM THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN MONDAY, THE 16TH DAY OF JULY 2018 / 25TH ASHADHA, 1940 WP(C).No. 20421 of 2018 ## **PETITIONER** RADHA SURENDRAN, AGED 54 YEARS, W/O. SURENDRAN, 'ONAMPALLIL THEKKETHIL".KOTTACKAKAM, MUTTOM P.O, HARIPAD, ALAPPUZHA DISTRICT. BY ADVS.SRI.S.SHANAVAS KHAN SMT.S.INDU RESPONDENT(S): 1. THE ALAPPUZHA DISTRICT CO-OPERATIVE BANK LTD, PALLIPAD BRANCH, ALAPPUZHA DISTRICT, REPRESENTED BY ITS BRANCH MANAGER-688 001. 2. THE AUTHORIZED OFFICER, THE ALAPPUZHA DISTRICT CO-OPERATIVE BANK LTD, ALAPPUZHA DISTRICT-688 001. BY SRI.P.C.SASIDHARAN, SC, ALAPPUZHA DISTRICT CO-OPERATIVE BANK LTD. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON,03.07.2018, THE COURT ON 16.07.2018 DELIVERED THE FOLLOWING: WP(C).No. 20421 of 2018 (C) PETITIONER(S)' EXHIBITS EXHIBIT P1 : TRUE COPY OF THE PASS BOOK PERTAINING TO LOAN ACCOUNT NO. HL 131 ISSUED TO THE PETITIONER BY THE FIRST RESPONDENT. EXHIBIT P2 : TRUE COPY OF THE NOTICE ISSUED TO THE PETITIONER BY THE FIRST RESPONDENT. EXHIBIT P3 : TRUE COPY OF THE RECEIPTS DATED 18-4-2015 EVIDENCING THE PAYMENTS MADE BY THE PETITIONER. RESPONDENTS' EXTS: NIL TRUE COPY P.S. TO JUDGE dsn **“CR”** ## **ANIL K. NARENDRAN, J.** **------------------------------------------------W.P.(C)No.20421 of 2018** **------------------------------------------------DATED THIS THE 16[th] DAY OF JULY, 2018** ## **JUDGMENT** The petitioner, who availed a loan for Rs.8,00,000/- from the 1[st] respondent District Co-operative Bank, in the year 2011, by mortgaging her property having an extent of 11½ cents in Sy.No.766/10B of Pallippadu Village in Karthikappally Taluk, has filed this writ petition under Article 226 of the Constitution of India seeking a writ of mandamus, commanding the respondents to grant her sufficient time to pay off the outstanding arrears in respect of the said loan account, in monthly instalments. The petitioner has also sought for a writ of mandamus commanding the respondents to regularise loan account No.HL-131, after accepting the arrears due. 2. On 21.06.2018, when the writ petition came up for admission, the learned Standing Counsel for the 1[st] respondent Bank was directed to get instructions and the matter was posted to 28.06.2018 for consideration. On that date, the learned Standing Counsel sought further time to get instructions and accordingly, the W.P.(C)No.20421 of 2018 -2- writ petition was listed to 03.07.2018 for consideration. 3. On 03.07.2018, the petitioner has filed I.A.No.11836 of 2018, under Rule 153 of the Rules of High Court of Kerala, 1971 seeking an order to accept on file, the documents marked as Exts.P1 to P3. Heard arguments of the learned counsel for the petitioner and also the learned Standing Counsel for the 1[st] respondent District Co-operative Bank. 4. Going by the averments in the writ petition, the petitioner availed a housing loan from the 1[st] respondent Bank (loan account No.HL-131), in the year 2011, for a sum of Rs.8,00,000/- by mortgaging her property having an extent of 11½ cents in Sy.No.766/10B of Pallippadu Village in Karthikappally Taluk, with a residential building belonging to the petitioner and her husband. The tenure of the loan is 15 years, i.e., till 2026, with a monthly instalment of Rs.8,819/-. Due to financial difficulties, there occurred default in repayment of loan. The petitioner could effect repayment only till 25.05.2016 and she has remitted around Rs.4,00,000/-. When there was default, the 1[st] respondent Bank resorted to coercive action and took symbolic possession of the property on 18.06.2018, under the W.P.(C)No.20421 of 2018 -3- provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (for brevity, 'SARFAESI Act'). Immediately, the petitioner approached the respondents and requested for some time. However, they did not accede to such request and instructed the petitioner to pay off the entire amount in lump. The petitioner is ready to pay the arrears in instalments, in order to regularise the loan account. As on the date of filing of the writ petition, i.e., 20.06.2018, the outstanding arrears comes to Rs.2,75,202/-. Though she had approached the respondents with a request to pay the arrears in instalments, they are not amenable for the same. 5. The first sentence in Ground A of the writ petition reads thus; “The amount demanded by the respondents is highly exorbitant as the petitioner is not a chronic defaulter.” 6. The plea raised in the writ petition that, the petitioner is not a chronic defaulter and that, she could effect repayment till 25.05.2016, are not supported by any documents on record. The writ petition filed by the petitioner contains only the memorandum of writ petition and the supporting affidavit. No W.P.(C)No.20421 of 2018 -4- documents whatsoever have been produced along with the writ petition to show the total amount outstanding, the overdue amount, etc. in respect of the loan transaction in question and also the amount already repaid. Except the bare statement in the writ petition, no documents whatsoever have been placed on record to show that she had approached the 1[st] respondent Bank with a request to pay off the outstanding arrears in instalments and to regularise the loan account. 7. Admittedly, the coercive steps initiated by the 1[st] respondent Bank and the 2[nd] respondent Authorised Officer, against the property offered by the petitioner as security, are under the provisions of the SARFAESI Act. The fact that, on 18.06.2018, the respondents took symbolic possession of the petitioner's property, stands admitted in paragraph 3 of the writ petition. However, she has not chosen to produce a copy of the possession notice issued under sub-section (4) of Section 13 of the said Act. In the writ petition, the petitioner has absolutely no case that, the respondents took symbolic possession of her property on 18.06.2018, without issuing any notice under the provisions of the SARFAESI Act, read with the provisions of the W.P.(C)No.20421 of 2018 -5- Security Interest (Enforcement) Rules, 2002. 8. The learned Standing Counsel for the 1[st] respondent Bank submitted that, the petitioner was irregular in repayment right from the beginning, i.e., from the year 2011. After availing a loan for Rs.8,00,000/- on 08.06.2011, she paid only a few instalments in time. Despite the issuance of notices invoking subsection (2) and sub-section (4) of Section 13 of the SARFAESI Act, the petitioner has not chosen to clear her liability due towards the Bank. The learned Standing Counsel would point out that, as on 27.06.2018, the total liability of the petitioner in loan account No.HL-131 comes to Rs.9,98,484/- and the overdue amount as on that date comes to Rs.2,92,339/-. 9. As already noticed, in the writ petition, the petitioner has absolutely no case that, the respondents took symbolic possession of her property on 18.06.2018, without issuing any notice under the provisions of the SARFAESI Act, read with the provisions of the Security Interest (Enforcement) Rules, 2002. It would indicate that, the respondents proceeded against the petitioner's property after issuing a notice in writing, under subsection (2) of Section 13 of the said Act, requiring her to W.P.(C)No.20421 of 2018 -6- discharge the liabilities in full within sixty days from the date of that notice. As provided under sub-section (3) of Section 13, the notice issued under sub-section (2) shall contain the details of the amount payable by the borrower and the secured assets intended to be enforced by the secured creditor in the event of non-payment of secured debts by the borrower. As the petitioner failed to discharge the liabilities, the 1[st] respondent Bank exercised its right under clause (a) of sub-section (4) of Section 13 of the said Act, and took symbolic possession of her property on 18.06.2018. The possession notice issued under Rule 8 of the Security Interest (Enforcement) Rules, 2002, in the form provided in Appendix IV, shall contain the details of the amount payable by the petitioner and the secured assets taken possession under sub-section (4) of Section 13 of the Act. Even without producing any such documents, the petitioner has sought for an interim order staying all further coercive proceedings against her, in respect of loan account No.HL-131, pending disposal of the writ petition. 10. On 28.06.2018, when the writ petition was taken up for consideration, it was pointed out to the learned counsel for W.P.(C)No.20421 of 2018 -7- the petitioner that the averments made in the writ petition are inadequate and no supporting materials whatsoever have been placed on record, in order to show the total amount outstanding, the overdue amount, etc. Thereafter, on 03.07.2018, when the matter was heard and reserved for judgment, the petitioner has filed I.A.No.11836 of 2018, under Rule 154 of the Rules of the High Court of Kerala, 1971, producing therewith a copy of the pass book of loan account No.HL-131 (as **Ext.P1** ); a copy of the notice issued by the 1[st] respondent Bank demanding the dues as on 22.05.2014 (as **Ext.P2** ); and two receipts dated 18.04.2015 evidencing payment of Rs.98,096/- and Rs.1,904/- respectively (as **Ext.P3** ). 11. As evident from Ext.P1 pass book, after availing a loan for Rs.8,00,000/- from the 1[st] respondent Bank on 08.06.2011, the petitioner made certain repayments on 10.01.2012, 06.02.2012, 09.10.2012, 18.04.2015, 27.04.2016 and 25.05.2016. Ext.P2 demand notice issued by the 1[st] respondent Bank, demanding dues as on 22.05.2014, would show that, despite repeated notices the petitioner has not chosen to repay the loan amount. From the facts noticed from Exts.P1 and P2 it is W.P.(C)No.20421 of 2018 -8- obvious that the petitioner is a chronic defaulter. However, the petitioner has averred in the writ petition that she is not a chronic defaulter. 12. 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 suppressed or are distorted, the very functioning of the writ courts would become impossible. 13. 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 W.P.(C)No.20421 of 2018 -9- 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 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** W.P.(C)No.20421 of 2018 -10- ## **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. 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) 14. 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 W.P.(C)No.20421 of 2018 -11- finding or roving enquiry of what has been asserted. Since Article 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. 15. In the instant case, as already noticed, the respondents took symbolic possession of her property on 18.06.2018, under sub-section (4) of Section 13 of the SARFAESI Act. It is only thereafter, the petitioner has approached this Court in this writ petition, seeking interference on the recovery proceedings, by invoking the equity jurisdiction of this Court under Article 226 of the Constitution of India. Along with the writ petition, the petitioner has not produced even a scrap of paper to show the total amount outstanding, the overdue amount, etc. in respect of the loan transaction in question, and also to show that she had approached the 1[st] respondent Bank with a request to pay off the outstanding arrears in instalments and to regularise the loan account. 16. As per sub-section (1) of Section 17 of the SARFAESI Act, any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of Section 13 taken by W.P.(C)No.20421 of 2018 -12- the secured creditor or his authorised officer under Chapter III of the said Act, may make an application along with such fee, as may be prescribed to the Debts Recovery Tribunal having jurisdiction in the matter, within forty-five days from the date on which such measures had been taken. ## 17. In **Authorised Officer, State Bank of Travancore** **v. Mathew K.C. [(2018) 3 SCC 85]** the Apex Court reiterated that, when the action of the Bank under sub-section (4) of Section 13 of the SARFAESI Act can be challenged by the aggrieved person by invoking an efficacious remedy provided under Section 17 of that Act, the institution of a writ petition under Article 226 of the Constitution of India is not sustainable. No doubt an alternative remedy is not an absolute bar to the exercise of extraordinary jurisdiction under Article 226, but by now it is well settled that where a statute provides efficacious and adequate remedy, the High Court will do well in not entertaining a petition under Article 226 and that, on misplaced considerations, statutory procedures cannot be allowed to be circumvented. W.P.(C)No.20421 of 2018 -13- In the result, this writ petition fails and the same is accordingly dismissed; however, without prejudice to the right of the petitioner to challenge the action taken by the respondents under sub-section (4) of Section 13 of the SARFAESI Act, by invoking the statutory remedy provided under Section 17 of that Act, and also the right, if any, of the petitioner to approach the 1[st] respondent Bank for regularisation of the loan account. No order as to costs. Sd/- **ANIL K. NARENDRAN JUDGE** dsn