RP Nos. 227 of 2017 and 228 of 2017 in O.P.(DRT) Nos. 122/2016 and 123/2016

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **THURSDAY, THE 16TH DAY OF MARCH 2017/25TH PHALGUNA, 1938** ## **RP.No. 227 of 2017 ()** **------------------------------(AGAINST THE JUDGMENT IN OP (DRT).NO. 122/2016 DATED 10/02/2017) -----------------** ## **REVIEW PETITIONER(S)/PETITIONERS:-** **----------------------------------------------------------** **1. M/S. SRAVANA TRADERS, K.K.N.BUILDINGS, BROADWAY, ERNAKULAM - 682 031.** ## **2. R.NATARAJAN,** **S/O.N.RAMALINGA IYER, OLIPARAMBIL HOUSE, PULLEPADY ROAD, ERNAKULAM, KOCHI - 682 018.** ## **BY ADV. SRI.S.EASWARAN** ## **RESPONDENT(S)/RESPONDENTS:-** **-----------------------------------------------------** **1. THE CHIEF MANAGER & AUTHORIZED OFFICER, SYNDICATE BANK, SHANMUGHAM ROAD BRANCH, PIONEER TOWERS, 1 FLOOR, ERNAKULAM - 682 031.** **2. THE DEBTS RECOVERY TRIBUNAL, ERNAKULAM, PIN - 682 036, REPRESENTED BY ITS REGISTRAR.** **R1 BY SRI.R.S. KALKURA, SC, SYNDICATE BANK SRI.HARISH GOPINATH,SC R2 BY SRI.JAGADEESH LAKSHMAN, CGC** **THIS REVIEW PETITION HAVING COME UP FOR ADMISSION ON 16-03-2017,ALONG WITH R.P.NO.228 OF 2017, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **sts** ## **RP.NO.227/2017** ## **APPENDIX** ## **PETITIONER'S ANNEXURES:** **ANNEXURE A1 COPY OF THE STATEMENT OF ACCOUNTS SHOWING AVAILABILITY OF THE FUNDS. ANNEXURE A2 COPY OF THE STATEMENT OF ACCOUNTS SHOWING AVAILABILITY OF THE FUNDS. ANNEXURE A3 COPY OF THE CHEQUE NO.499692 DATED 3/3/2017 ANNEXURE A4 COPY OF THE CHEQUE NO.011203 DATED 3/3/2017 ANNEXURE A5 COPY OF THE LETTER DATED 6/3/2017 ANNEXURE A5(A) COPY OF THE CHEQUE NO.492427** ## **RESPONDENT'S ANNEXURES: NIL** **/TRUE COPY/** **P.A.TO JUDGE** **sts** ## K. VINOD CHANDRAN, J - - - - - - - - - - - - -- - - - - - - - - - - - - - - - R.P No. 227 of 2017 in O.P(DRT) No. 122 of 2016 & R.P No.228 of 2017 in O.P(DRT) No.123 of 2016 - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 16[th] day of March, 2017 ## O R D E R The petitioners in the original petitions have filed the above review petitions on the ground that they were always willing and ready to redeem the mortgage and that they had attempted to do it, in accordance with the judgment passed which was frustrated by the Bank by demanding amounts far beyond that covered by the notice under Section 13(2) of the SARFAESI Act. It is also argued that the sale of the property having been occasioned for Rs.4.7 crores; a reading of paragraphs 5 and 6 would indicate that what was intended by this Court was the payment only of the sale consideration of the property. 2. The judgment indicates that the petitioner had R.P Nos.227 & 228/2017 : 2 : been consistently flouting the conditional orders issued and the various undertakings regularly made before, the Tribunal and before this Court. The securitistion proceedings were initiated by notice under Section 13 (2) on 01.09.2011. In the Securitisation Applications (S.A) filed against the proceedings there was initially a conditional order directing payment of Rs. 25 lakhs on or before 14.02.2012, which was not complied. After protracted litigation before the CJM's Court, the DRT and before this Court the Bank obtained possession of the property on 18.09.2014. Sale notice was published and the DRT refused to interfere with it, but all the same stayed the confirmation till the disposal of the S.A's. 3. Sale went through in public auction and then in the S.A's separate affidavits were filed by the respective petitioners withdrawing all contentions and undertaking to pay the amounts, latest by 30.11.2016. The S.A's were disposed R.P Nos.227 & 228/2017 : 3 : of recording the undertaking. On non-compliance of the undertaking, the petitioner was again before the Tribunal with a review application. The Tribunal rejected the same finding itself to be functus officio. Original petitions were filed against the order of the Tribunal in which the judgment under review was passed. This Court found that the Tribunal could not have reviewed the order passed in the S.A's especially since the order was passed on the undertaking of the petitioners. 4. The Bank though had sold the the property for Rs.4.7 crores, did not confirm the sale to enable the petitioners to comply with their undertaking. The petitioners having not paid up the money, the auction purchasers had sought thirty days time to pay the balance sale consideration which was allowed by the Bank. Before this Court, in the Original Petitions, initially a status quo order was granted on 19.12.2016. The Bank pressed for a hearing since the R.P Nos.227 & 228/2017 : 4 : purchasers were pressing for conclusion of the auction proceedings and sale. The purchasers were not impleaded in the O.P's, despite which this Court by interim order dated 23.01.2017, again on the undertaking made by the petitioners before Court, directed the entire sale proceedings coming to Rs.4.7crores be deposited along with interest at 12% for Rs.1crore from 28.03.2016 to the date of deposit; to take in the compensation to the purchaser. The said undertaking was also not complied with. 5. The matter was heard and judgment was delivered. Eventually the petitioner was given a further chance to save the valuable property and in the circumstances coming to fore of the sale having been occasioned, the entire arrears were directed to be paid on or before 03.03.2017. This was because payment of Rs.4.7 crores, the sale consideration, would not have wiped out the debt and the mortgage would R.P Nos.227 & 228/2017 : 5 : have survived even after such a deposit. There is no dispute that the amounts so directed were not paid within that time. 6. Subsequently, on 06.03.2016 the petitioner is said to have proffered one cheque to the Bank produced as Annexure A5(a). It is the submission of the Bank that the said cheque was not produced before the Bank. Further it is also clarified that the account in which Annexure A5(a) cheque issued had nil balance as on that date as is evidenced by Annexure R1(g). The petitioner's contention is also that there were amounts available in two separate accounts of third parties who had issued Annexure A3 and A4 cheques to the petitioner, which could have been deposited in the account in which Annexure A5(a) cheque was issued. The petitioner had sought for a confirmation from the Bank, as per Annexure A5, which was not responded to and this caused the delay is the argument. If the Bank had responded then, the petitioner R.P Nos.227 & 228/2017 : 6 : would have immediately deposited the cheques issued by third parties, into his account and that would have enabled encashment of Annexure A5(a) cheque is the further submission. 7. This Court is thoroughly dissatisfied with the conduct of the petitioners and there is a clear attempt to abuse the process of law. The time granted repeatedly was on equitable considerations and the petitioners have shown themselves to be not worthy of such treatment. When there was a specific direction issued by this Court that the entire amounts due should be paid, on or before 03.03.2016 there was no reason to park money in third parties' accounts and issue a cheque in an account in which there was no balance at all. There was no room for seeking any further confirmation from the Bank as to the deposit, since the directions of this Court were clear. The further confirmation was also sought after the R.P Nos.227 & 228/2017 : 7 : date specified by this Court being 03.03.2016. Yet again even the cheque at Annexure A5(a) did not cover the entire amounts due in the accounts, the recovery of which was proceeded with under the SARFAESI Act. 8. The petitioners have a contention that the Bank demanded more money than that was due in the accounts, which were specifically proceeded with under the SARFAESI Act. It is the submission that the Bank insisted on paying up the dues in one another account of a firm by name Meenakshi Silks and Sarees. The respondent Bank has filed a counter affidavit in which the various accounts and dues are specifically noticed. There are said to be two loans in the name of Saravana Traders, which is the petitioner in R.PNo.227/2017 each having dues of Rs.2,72,56,100.69 and Rs.61,93,097.78/-. The petitioner in R.PNo.228/2017 M/s N.Ramalinga Iyer has dues of Rs.2,51,99,623.37. The total R.P Nos.227 & 228/2017 : 8 : comes to Rs.5,86,48,821.70/-. This is what this Court had directed that the petitioner would pay out. The petitioner had only proffered a Cheque of Rs.4,83,50,000/- (Annexure A5(a). The other account also has dues of Rs.1,44,36,116.02/-; but that was not demanded. If at all Annexure A3 and A4 cheques were properly credited and the amounts paid up it would have been only Rs.4,01,50,000/- far short of the amounts required; by more than 1.5 Crores, excluding the dues of that other fourth account. 9. In this context, the learned counsel for the petitioner has a contention that on a reading of paragraphs 5 and 6 of the judgment, the only stipulation is payment of the sale consideration along with reasonable compensation to the purchasers who had already deposited Rs.1 crore. This is another attempt of the petitioners to misinterpret the directions issued by this Court and thus delay the satisfaction R.P Nos.227 & 228/2017 : 9 : of the loan amount. In paragraph 5 this Court had merely noticed the earlier order wherein there was a direction on the basis of the undertaking given by the petitioners that the entire sale proceedings coming to Rs.4.7 crores along with 12% interest for 1 crore from 28.03.2016 would be deposited. As noticed, the said undertaking and the direction in the interim order were not complied with. It is hence the judgment was passed operative portion of which is seen at paragraph 6. Therein the specific direction to the petitioner, on a last chance being sought, was for settlement of the entire dues for which the petitioner was permitted time till 03.03.2017. The time so granted was on account of the petitioner having sought time up to 03.03.2017 before the Tribunal, for complying with the undertaking made on affidavit at the time of withdrawal of contentions in the S.As. The petitioners' interpretation of the judgment of this Court R.P Nos.227 & 228/2017 : 10 : hence cannot be accepted. 10. A further contention is raised by the learned Counsel for the petitioner relying on 1995(1) SCC 161(New Kenilworth Hotels (P) Ltd. v. Ashoka Industries Ltd.) and 2014(5) SCC 610 (Mathew Varghese v. M.Amritha Kumar and others) as to the right of the petitioner to redeem mortgage at any time before the sale has been concluded by conveyance and possession being handed over. The learned Counsel would also pray that suitable observation may be made with respect to the said right. This Court is unable to make any such observations, especially since the present proceedings is a review proceedings and what the petitioners seek for is a rehearing of the entire matter, after having at the time of hearing of the original petitions sought for time to settle the liability which was not done within the time granted. The issue now raised would go beyond the contours of review R.P Nos.227 & 228/2017 : 11 : jurisdiction as has been succinctly stated in State of West Bengal v. Kemal Sen Gupta [2008 (8) SCC 612]. 11. This Court has already expressed its displeasure in the petitioners having attempted to circumvent the directions of this Court acting in such a manner as to raise serious apprehensions and suspicion as to the bonafides of the petitioners. The review petitions are totally devoid of merit and was an unnecessary exercise when the petitioners had not attempted to satisfy the liability at any time before 03.03.2017 as directed by this Court. The further attempt to create a make-believe payment by showing amounts in accounts of third parties and brandishing cheques, without depositing it properly and without maintaining sufficient balance to honour the same, are all attempts to take the Court for a ride and visit undue hardship on the purchasers who have paid the entire consideration. There is also no attempt by the petitioners to R.P Nos.227 & 228/2017 : 12 : initiate proper proceedings; with the purchaser on the party array. 12. This Court has specifically noticed at the earlier instance that the purchasers were not in the party array, but had granted time, as a matter of indulgence only since it could be safely assumed that the purchasers were aware of the proceedings and had only deposited 25% of the bid amounts . This Court had hence made it clear in the judgment, that the Bank would inform the purchasers about the directions of this Court; who shall also be forewarned to be ready with the balance consideration; if the petitioner fails to comply with the conditions by 03.03.2017. The Bank has in its counter affidavit categorically stated that the purchasers were informed as had been directed and they paid the entire balance consideration on 04.03.2017. The sale certificate dated 04.03.2017 is also produced as Annexure R1(d). The purchaser R.P Nos.227 & 228/2017 : 13 : has also taken possession of the asset on 06.03.2017. There is absolutely no scope for review and the proceedings are found to be mischievous and a clear abuse of process of Court. In such circumstance, the Review Petitions are rejected with exemplary costs of Rs.10,000/- in each, which shall be recovered by the Bank from the respective petitioners as money due to the Bank, along with the dues in the loan accounts. Sd/- (K. VINOD CHANDRAN, JUDGE) jma //true copy// P.A to Judge