Sajula Sudheer v. Sundaram BNP Paribas Home Finance Ltd.

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT** **THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR** **&** **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY** **FRIDAY, THE 22ND DAY OF MAY 2020 / 1ST JYAISHTA, 1942** ## **WA.No.1198 OF 2017** **AGAINST THE ORDER/JUDGMENT IN WPC 17403/2017 DATED 26-05-2017 OF HIGH COURT OF KERALA** ## **APPELLANT/PETITIONER:** **SAJULA SUDHEER W/O SUDHEER, RESIDING AT SUDHEER MANZIL, KANNAMKODE, ADOOR (KLA) POST,PATHANAMTHITTA DISTRICT, PIN: 691 523.** **BY ADVS. SRI.R.S.KALKURA SMT.R.BINDU SRI.HARISH GOPINATH SRI.M.S.KALESH** ## **RESPONDENTS:** **1 SUNDARAM BNP PARIBASS HOME FINANCE LTD. HAVING ITS REGISTERED OFFICE AT SUNDARAM TOWERS, 46, WHITES ROAD, CHENNAI-600 014, REPRESENTED BY ITS MANAGING DIRECTOR. 2 THE AUTHORISED OFFICER SUNDARAM BNP PARIBASS HOME FINANCE LTD.,SUNDARAM TOWERS, 46, WHITES ROAD,CHENNAI-600 014.** ## **SRI.VARGHESE C.KURIAKOSE, STANDING COUNSEL FOR RESPONDENTS** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 22.05.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** WA.No.1198 OF 2017 2 ## **J U D G M E N T** ## **S.MANIKUMAR,CJ** This appeal is preferred by the writ petitioner in W.P.(C) No.17403/2017 against the judgment dated 26.5.2017, whereby the writ petition was dismissed. 2. The subject issue relates to proceedings initiated against the appellant by the respondent banking company as per the provisions of the SARFAESI Act, 2002. Admittedly the loan amount was not repaid by the appellant. Consequent to which, action was initiated against the appellant under the provisions of SARFAESI Act,2002 as per proceedings dated 1.5.2015. Since the appellant failed to pay the amount as demanded under the notice under section 13(2) of the Act, possession notices dated 11.9.2015 and 16.9.2015 were issued under the two loan accounts. Thereupon, the appellant approached this Court by filing W.P.C() No. 31276/2015, which was disposed of as per judgment dated 24th May, 2016 granting liberty to the petitioner to discharge the entire liability due to the bank, on WA.No.1198 OF 2017 3 condition that, the appellant deposits a further sum of Rs.5 lakhs on or before 25.6.2016. However, it was further directed that, if there was failure to pay the aforesaid amount or to discharge the entire liability as specified, it shall be open to the respondent bank to take appropriate proceedings in accordance with law. 3. The directions so issued was not complied with by the appellant and the bank proceeded against the appellant in continuation of the proceedings specified above, evident from Ext.P2 notice issued by the Advocate Commissioner dated 11.5.2015 intimating the appellant that possession of the schedule property would be taken on or after 22.5.2017 if the appellant was not surrendering vacant possession before that. 4. The learned single Judge after taking into account the peculiar facts situation held that since the appellant did not comply with the conditions stipulated in the earlier round of litigation, held that appellant is not entitled to get any relief. Accordingly that the writ petition was dismissed. This appeal came up for admission before this Court on 14.6.2017 and on that day appellant sought adjournment. WA.No.1198 OF 2017 4 Even though it was again posted on 19.6.2017, appellant again sought adjournment and it was pending thereafter before this Court without any interim orders. 5. We have heard learned counsel for appellant and perused the pleadings and documents on record. 6. Now three years have elapsed. At this distance of time it cannot be legally presumed and visualised that anything survives to be considered in this appeal. Moreover, the Apex Court has repeatedly in various its judgments deprecated the practice of entertaining writ petitions against the proceedings initiated by the banks under the SARFAESI Act. After analysing and conducting an in-depth survey of the proposition of law laid down by the Apex Court in various of its judgments, in **Authorised Officer, State Bank of Travancore and another v. Mathew K.C.** reported in (2018) 3 SCC 85, it was held 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 WA.No.1198 OF 2017 5 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 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 WA.No.1198 OF 2017 6 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. 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 WA.No.1198 OF 2017 7 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.” ## 7. Earlier in **United Bank of India v. Satyawati** **Tondon and others** [(2010) 8 SCC 110], upon detailed consideration of the statutory scheme under the SARFAESI Act, 2002, availability of a remedy to the aggrieved under Section 17 before the Tribunal and the appellate remedy under Section 18 before the Appellate Tribunal, object and purpose of the legislation, Hon'ble Apex Court observed that a writ petition ought not to be entertained in view of the availability of an alternative statutory remedy. “43. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, WA.No.1198 OF 2017 8 other types of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc. the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, the High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . 55. It is a matter of serious concern that despite repeated pronouncement of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and the SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions WA.No.1198 OF 2017 9 to recover their dues. We hope and trust that in future the High Courts will exercise their discretion in such matters with greater caution, care and circumspection.” ## 8. In **Civil Appeal Nos.10243-10250 of 2018** [ICICI Bank Ltd. v. Umakanta Mohapatra and Others], by order dated 5.10.2018, the Hon'ble Apex Court reaffirmed the legal position that High Court has no jurisdiction to entertain writ petitions under Article 226 of the Constitution of India, relating to matters coming under the purview of SARFAESI Act, 2002, where a statutory remedy is available by filing an application under Section 17 of the said Act. ## 9. Taking into account the factual and legal circumstances, we are of the considered view that the appellant is also not entitled to any relief in this appeal since we find that there are no legal infirmities in the matter of exercising judicial discretion under Article 226 of the Constitution of India, by the learned single Judge. Needless to say, appeal fails, accordingly it is dismissed. However, we make it clear that, if any amounts are remaining due from the appellant to the respondent bank WA.No.1198 OF 2017 10 on the loan accounts in the instant writ appeal, dismissal of this appeal would not stand in the way of the bank providing time for any payment on account of the moratorium declared by the Governments/Reserve Bank/the bank in question, due to the COVID pandemic. **Sd/-** **S.MANIKUMAR** **CHIEF JUSTICE** **Sd/-** smv **SHAJI P.CHALY JUDGE**