RadhaKRISHNAN MULLATH and others v Union of India and Canara Bank (W.A. No. 913 of 2021)

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** **THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR** **&** **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY** **THURSDAY, THE 22[ND] DAY OF JULY 2021 / 31ST ASHADHA, 1943** ## **WA NO. 913 OF 2021** **AGAINST THE JUDGMENT IN WP(C) 12041/2021 OF HIGH COURT OF KERALA,** ## **ERNAKULAM** ## **APPELLANTS/PETITIONERS:** |**1**|**RADHAKRISHNAN MULLATH,**| |---|---| ||**AGED 71 YEARS**| ||**S/O.KANANGATH RADHAKRISHNA MENON, MULLATH HOUSE,**| ||**KARIKKAD P.O., THRISSUR DISTRICT-680 519.**| |**2**|**SANDHEEP RADHAKRISHNA MENON,**| ||**AGED 43 YEARS**| ||**S/O.RADHAKRISHNAN MULLATH, MULLATH HOUSE, KARIKKAD**| ||**P.O., THRISSUR DISTRICT-680 519.**| |**3**|**DILEEP RADHAKRISHNA MENON,**| ||**AGED 33 YEARS**| ||**S/O.RADHAKRISHNAN MULLATH, MULLATH HOUSE, KARIKKAD**| ||**P.O., THRISSUR DISTRICT-680 519.**| |**4**|**DEEPAK RADHAKRISHNA MENON,**| ||**AGED 38 YEARS**| ||**S/O.RADHAKRISHNAN MULLATH, MULLATH HOUSE, KARIKKAD**| ||**P.O., THRISSUR DISTRICT-680 519.**| |**5**|**ODUMPULLY SYAMALA DEVI,**| ||**AGED 63 YEARS**| ||**W/O.RADHAKRISHNAN MULLATH, MULLATH HOUSE, KARIKKAD**| ||**P.O., THRISSUR DISTRICT-680 519.**| ||**BY ADVS.**| ||**V.JOHN MANI**| ||**S.JAYANT**| ||**JACKSON JOHNY**| ||**VARGHESE SABU**| ||**K.K.SETHULAKSHMI**| ||**GAYATHRI MENON**| W.A.No.913 of 2021 2 ## **RESPONDENTS:** - **1 UNION OF INDIA, REPRESENTED BY SECRETARY, DEPARTMENT OF FINANCIAL SERVICES, MINISTRY OF FINANCES, 3RD FLOOR, JEEVAN DEEP BUILDING, SUNSAD MARG, NEW DELHI-110 001.** - **2 THE CHIEF MANAGER, CANARA BANK, KUNNAMKULAM BRANCH, XV/524D, CENTRE PLAZA, THRISSUR ROAD, KUNNAMKULAM, THRISSUR-680 503.** **SRI.P.VIJAYAKUMAR, ASG FOR R1 SRI.M.GOPIKRISHNAN NAMBIAR FOR R2** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 22.07.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.A.No.913 of 2021 3 ## **JUDGMENT** ## **Dated this the 22[nd] day of July, 2021** ## **SHAJI P.CHALY,J** This appeal is preferred by the petitioners in the writ petition, challenging the judgment of the learned Single Judge dated 21.6.2021 in W.P.(C) No.12041/2021, whereby the learned Single Judge dismissed the writ petition declining the reliefs sought for by the petitioners under the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The learned Single Judge after assimilating the factual and legal situations permitted the petitioners to clear off the liability of an amount of Rs.5,46,25,726/-(Rupees Five Crores forty six thousand twenty five thousand seven hundred and twenty six only) in eight successive monthly installments commencing from 21.7.2021 and if the petitioners are complying with the directions, the respondent bank was directed to keep the coercive action initiated against the petitioners in abeyance, with a further rider that the respondents would be at liberty to continue the action under the SARFAESI Act, if a single installment is defaulted. W.A.No.913 of 2021 4 2. The contention advanced by the appellants in the appeal is that appellants wanted to clear of only the defaulted instalments of the loan amount and to regularise the Overdraft facility, however, the learned Single Judge without considering the entire aspects put forth by the appellants, directed the appellants to clear of the entire liability under the loan transaction in eight successive installments commencing from 21.7.2021. It was also pointed out that since the amount remaining in the loan transaction is a huge amount, appellants would not be in a position to pay the same in eight successive monthly installments. It was further submitted that considering the current pandemic situation, learned Single Judge ought to have considered the willingness of the appellants to clear the defaulted instalments, and ought to have been permitted to remit the regular monthly loan installment, after regularising the loan account . 3. We have heard, learned counsel for appellants Sri.John Mani and perused the pleadings and materials on record. 4. The subject issue arises under the provisions of the SARFAESI Act, 2002. The Apex Court had occasion to consider as to whether the writ petition is maintainable against the proceedings initiated under the SARFAESI Act in various W.A.No.913 of 2021 5 judgments and finally in **Authorised Officer, State Bank of Travancore and another v. Mathew K.C.** reported in [(2018) 3 SCC 85] held that the writ court may not be right in entertaining writ petitions against the action initiated under the provisions of the SARFAESI Act. The relevant paragraphs of the judgment in **K.C.Mathew** (supra) reads thus: “15. It is the solemn duty of the Court to apply the correct law without waiting for an objection to be raised by a party, especially when the law stands well settled. Any departure, if permissible, has to be for reasons discussed, of the case falling under a defined exception, duly discussed after noticing the relevant law. In financial matters grant of ex-parte interim orders can have a deleterious effect and it is not sufficient to say that the aggrieved has the remedy to move for vacating the interim order. Loans by financial institutions are granted from public money generated at the tax payers expense. Such loan does not become the property of the person taking the loan, but retains its character of public money given in a fiduciary capacity as entrustment by the public. Timely repayment also ensures liquidity to facilitate loan to another in need, by circulation of the money and cannot be permitted to be blocked by frivolous litigation by those who can afford the luxury of the same. The caution required, as expressed in Satyawati Tandon (supra), has also not been kept in mind before passing the impugned interim order:- “46. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes, cess, fees, etc. seriously impedes execution of projects of public importance and disables them from discharging their constitutional and legal obligations towards the citizens. In W.A.No.913 of 2021 6 cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions, which (sic will) ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Of course, if the petitioner is able to show that its case falls within any of the exceptions carved out in Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad, Whirlpool Corpn. v. Registrar of Trade Marks and Harbanslal Sahnia v. Indian Oil Corpn. Ltd. and some other judgments, then the High Court may, after considering all the relevant parameters and public interest, pass an appropriate interim order.” 16. The writ petition ought not to have been entertained and the interim order granted for the mere asking without assigning special reasons, and that too without even granting opportunity to the Appellant to contest the maintainability of the writ petition and failure to notice the subsequent developments in the interregnum. The opinion of the Division Bench that the counter affidavit having subsequently been filed, stay/modification could be sought of the interim order cannot be considered sufficient justification to have declined interference. 17. The writ petition ought not to have been entertained and the interim order granted for the mere asking without assigning special reasons, and that too without even granting opportunity to the Appellant to contest the maintainability of the writ petition and failure to notice the subsequent developments in the interregnum. The opinion of the Division Bench that the counter affidavit having subsequently been filed, stay/modification could be sought of the interim order cannot be considered sufficient justification to have declined interference. W.A.No.913 of 2021 7 18. We cannot help but disapprove the approach of the High Court for reasons already noticed in Dwarikesh Sugar Industries Ltd. vs. Prem Heavy Engineering Works (P) Ltd. and Another, 1997 (6) SCC 450, observing :- “32. When a position, in law, is well settled as a result of judicial pronouncement of this Court, it would amount to judicial impropriety to say the least, for the subordinate courts including the High Courts to ignore the settled decisions and then to pass a judicial order which is clearly contrary to the settled legal position. Such judicial adventurism cannot be permitted and we strongly deprecate the tendency of the subordinate courts in not applying the settled principles and in passing whimsical orders which necessarily has the effect of granting wrongful and unwarranted relief to one of the parties. It is time that this tendency stops.” 5. Considering the facts and circumstances involved in the case at hand, we are of the view that a notice is already issued under section 13(2) of the SARFAESI Act and proceedings have started. If at all the appellants are aggrieved by any action, it is for the appellants to pursue the remedy in contemplation of the provisions of the SARFAESI Act. Therefore in our view the learned Single Judge was right in declining the reliefs sought, for interference with the SARFAESI proceedings and granting the possible relief of instalment payment of the due amounts . Taking into account the aforesaid factual and legal circumstances, we do not W.A.No.913 of 2021 8 think appellants have made out any case for interference in the judgment of the learned Single Judge exercising the powers conferred on this Court under section 5 of the Kerala High Court there being no jurisdictional error or other legal infirmities justifying us to do so. Needless to say, writ appeal fails, accordingly it is dismissed. **Sd/-** **S.MANIKUMAR CHIEF JUSTICE** **Sd/-** smv **SHAJI P.CHALY JUDGE**