SB Nazar and Others v. Union of India and Others (OP (DRT) Nos. 74, 75 & 80 of 2019) High Court of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN** **TUESDAY, THE 28TH DAY OF MAY 2019 / 7TH JYAISHTA, 1941** **OP (DRT).No. 74 of 2019** **IN SA 318/2018 of DEBT RECOVERY TRIBUNAL, ERNAKULAM** ## **PETITIONER/S:** - **1 M/S.NAASCO TRADING INDIA PVT. LTD. 7/1245. KARAVARAM, ALAMCODE P.O., ATTINGAL, THIRUVANTAHAPURAM REPREENTED BY ITS MANAGING DIRECTOR S. NAZAR.** - **2 NAZAR.S., SB HOUSE, ALANCODE P.O., ATTINGAL, THIRUVANTAHPURAM 695 102.** - **3 RAHEENA.J., W/O. NAZAR. S., SB HOUSE, ALANCODE P.O., ATTINGAL, THIRUVANTAHPURAM 695 012.** - **4 JALALUDDIN, NOUFAL MANZIL, NEAR GOVT HIGH SCHOOL, ALAMCODE P.O., ATTINGAL.** **BY ADVS. SRI.C.S.ULLAS SMT.USHA BABY** ## **RESPONDENT/S:** - **1 THE UNION OF INDIA REPRESENTED BY ITS SECRETARY, MINISTRY OF FINANCE, DEPARTMENT OF ECONOMICS AFFAIRS, NEW DELHI 110 001.** - **2 THE DEBTS RECOVERY TRIBUNAL-2, ERNAKULAM AND LAKSHWADEEP, 1ST FLOOR, KERALA STATE HOUSING BOARD BUILDING, PANAMPILLY NAGAR, ERNAKULAM 682 014, REPRESENTED BY ITS REGISTRAR.** - **3 STATE BANK OF INDIA REPRESENTED BY ITS CHIEF MANGER, TEMPLE VIEW BRANCH KARIMPANAL ARCADE FORT P.O., THIRUVANANTHAPURAM 695 023.** - **4 THE AUTHORISED OFFICER, STATE BANK OF INDIA, TEMPLE VIEW BRANCH, KARIMPANAL ARCADE FORT P.O., THIRUVANANTHAPURAM 695 023.** ## **BY ADV. SRI.TOM K.THOMAS** **THIS OP (DEBT RECOVERY TRIBUNAL) HAVING COME UP FOR ADMISSION ON 28.05.2019, ALONG WITH OP (DRT).75/2019, OP (DRT).80/2019, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **OP (DRT).Nos. 74, 75 & 80 of 2019** **2** ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN** **TUESDAY, THE 28TH DAY OF MAY 2019 / 7TH JYAISHTA, 1941** **OP (DRT).No. 75 of 2019** **IN SA 309/2018 of DEBT RECOVERY TRIBUNAL, ERNAKULAM** ## **PETITIONER/S:** |**1**|**S.B.NAZAR**| |---|---| ||**AGED 50 YEARS**| ||**S.B.NAZAR,PROPRIETOR,M/S SB AGENCIES,**| ||**NH ROAD,AANCODE.P.O,ATTINGAL-691102.**| ||**THIRUVANANTHAPURAM.**| |**2**|**SMT.RAHEENA.J,**| ||**AGED 24 YEARS**| ||**W/O.S.NAZAR,NH ROAD,AANCODE.P.O,**| ||**ATTINGAL-695102,THIRUVANANTHAPURAM.**| ||**BY ADVS.**| ||**SRI.C.S.ULLAS**| ||**SMT.USHA BABY**| ## **RESPONDENT/S:** |**1**|**THE UNION OF INDIA**| |---|---| ||**REPRESENTED BY ITS SECRETARY,**| ||**MINISTRY OF FINANCE(DEPARTMENT OF ECONOMICS AFFAIRS)NEW**| ||**DELHI-110001.**| |**2**|**THE DEBTS RECOVERY TRIBUNAL-2(ERNAKULAM AND LAKSHWADEEP)**| ||**1ST FLOOR,KERALA STATE HOUSING BOARD BUILDING,PANAMPILLY**| ||**NAGAR,ERNAKULAM-682014,**| ||**REPRESENTED BY ITS REGISTRAR.**| |**3**|**STATE BANK OF INDIA,**| ||**REPRESENTED BY ITS CHIEF MANAGER,**| ||**TEMPLE VIEW BRANCH,KARIMPANAL ARCADE,**| ||**FORT.P.O,THIRUVANANTHAPURAM-695023.**| **OP (DRT).Nos. 74, 75 & 80 of 2019** **3** **4 THE AUTHORISED OFFICER, STATE BANK OF INDIA,TEMPLE VIEW BRANCH,KARIMPANAL ARCADE FORT.P.O, THIRUVANANTHAPURAM-695023.** **BY ADV. SRI.TOM K.THOMAS** **OTHER PRESENT:** ## **SRI.P.VIJAYAKUMAR-ASG** **THIS OP (DEBT RECOVERY TRIBUNAL) HAVING COME UP FOR ADMISSION ON 28.05.2019, ALONG WITH OP (DRT).80/2019, OP (DRT).74/2019, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **OP (DRT).Nos. 74, 75 & 80 of 2019** **4** ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN** **TUESDAY, THE 28TH DAY OF MAY 2019 / 7TH JYAISHTA, 1941** **OP (DRT).No. 80 of 2019** **IN SA 310/2018 of DEBT RECOVERY TRIBUNAL, ERNAKULAM** ## **PETITIONER/S:** **1 S.B.NAZAR AGED 49 YEARS PROPRIETOR, M/S. SB GRANITES, AND SANITARY WARES, NH ROAD, AANCODE P.O, ATTINGAL-695102, THIRUVANANTHAPURAM.** - **2 SMT. RAHEENA J PROPRIETRIX, M/S. SB GRANITES, AND SANITARY WARES, NH ROAD, AANCODE P.O, ATTINGAL-695102, THIRUVANANTHAPURAM.** - **3 JALALUDDIN NOUFAL MANZIL,NEAR GOVT.HIGH SCHOOL,ALAMCODE P.O,ATTINGAL,THIRUVANANTHAPURAM.** **BY ADVS. SRI.C.S.ULLAS SMT.USHA BABY** ## **RESPONDENT/S:** |**1**|**THE UNION OF INDIA**| |---|---| ||**REPRESENTED BY ITS SECRETARY,**| ||**MINISTRY OF FINANCE(DEPARTMENT OF ECONOMICS AFFAIRS) NEW**| ||**DELHI-110001.**| |**2**|**THE DEBTS RECOVERY TRIBUNAL-2**| ||**(ERNAKULAM AND LAKSHWADEEP) 1ST FLOOR, KERALA STATE HOUSING**| ||**BOARD BUILDING, PANAMPILLY NAGAR, ERNAKULAM-682014,**| ||**REPRESENTED BY ITS REGISTRAR.**| **OP (DRT).Nos. 74, 75 & 80 of 2019** **5** - **3 STATE BANK OF INDIA REPRESENTED BY ITS CHIEF, MANAGER, TEMPLE VIEW BRANCH, KARIMPANAL ARCADE, FORT P.O, THIRUVANANTHAPURAM-695023.** - **4 THE AUTHORISED OFFICER STATE BANK OF INDIA, TEMPLE VIEW BRANCH KARIMPANAL ARCADE, FORT P.O, THIRUVANANTHAPURAM-695023.** ## **BY ADV. SRI.TOM K.THOMAS** **THIS OP (DEBT RECOVERY TRIBUNAL) HAVING COME UP FOR ADMISSION ON 28.05.2019, ALONG WITH OP (DRT).74/2019, OP (DRT).75/2019, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **OP (DRT).Nos. 74, 75 & 80 of 2019** **6** ## **J U D G M E N T** I have taken up these cases together and I propose to dispose them of jointly, since the legal and factual issues involved are concatenated with each each and the reliefs sought for are interdependent and any direction given in one of the cases will certainly impact the reliefs to be granted in the other. 2. These three original petitions have been filed by a certain Sri.S.B.Nazar and his wife Smt.Raheena J., who are stated to be controlling two partnership firms by name, M/s.S.B. Granites and M/s.S.B. Agencies as also the members and Directors of a Private Limited Company by name, Naasco Trading India Pvt Ltd. In two of these matters, a certain Sri.Jalaluddin is also a petitioner and he is stated to be the guarantor of certain loan facilities availed of by Sri.Nazar, his wife Smt.Raheena J., and the afore mentioned Company. 3. All the loans involved in these cases are conceded to have been taken from the erstwhile State Bank of Travancore, which has now been merged into the State Bank of India and the Bank alleges that all the accounts have now become heavily out of order. The Bank submits that they, therefore, were constrained to **OP (DRT).Nos. 74, 75 & 80 of 2019** **7** initiate action under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act ('the SARFAESI Act' for brevity), against the petitioners and that the petitioners therefore, approached the Debts Recovery Tribunal, Kerala by filing three different Securitisation Applications, which are numbered as S.A.Nos.318 of 2019, 309 of 2019 and 310 of 2019. 4. Sri.C.S.Ullas, the learned counsel appearing for the petitioners in all these cases, affirms the afore narration of facts but says that pending the aforementioned Securitisation Applications, his clients preferred fresh applications for amendment of the pleadings in the said S.As, but that the DRT refused to consider them and proceeded to hear the Securitisation Applications themselves finally and he therefore, pleads that the said Tribunal be directed not to issue final orders in the S.As, before orders are issued on the amendment applications. He says that this Court has already declared the law in **Veena Prabhakumar v. Dhanalaxmi Bank (O.P.(DRT)No.48 of 2019)** that applications for amendment of pending Securisation Applications are certainly maintainable and that it is enjoined upon the DRT to consider the same on its merits. **OP (DRT).Nos. 74, 75 & 80 of 2019** **8** 5. In answer to the aforementioned submissions of Sri.C.S.Ullas, Sri.Tom K. Thomas, the learned standing counsel appearing for the respondent - Bank, submits that a detailed counter affidavit has been placed on record, which would clearly indicate the attempt of the petitioners in protracting proceedings before the DRT. He brings to my notice the averments in paragraph 5 of the counter affidavit, which reads as under: “5. It is submitted that, simultaneously proceedings were also initiated under the SARFAESI Act for recovery of the amounts. The petitioners have approached the Debts Recovery Tribunal by filing S.A.No.309 of 2018 challenging the 13(2) notice dated 20.11.2017 ~~and 03.04.2018~~ as well as 13(4) possession notice dated 08.06.2018 issued under the provisions of the SARFAESI Act. The above Securitisation Application was filed in the month of July 2018. The bank filed Written Statement as early as on 27.08.2018 and has been pressing for an early hearing of the matter. On 01.10.2018 the counsel appearing for the petitioner herein sought time for filing rejoinder and the case was posted to 08.10.2018 for filing rejoinder with a specific direction that in case the rejoinder is not filed on that date, the chance of filing the same would be closed. Again when the matter came up for consideration on 08.10.2018 and the counsel for the petitioner again sought time for filing rejoinder. In view of the earlier order, the case was posted to 23.10.2018 for hearing. On 23.10.2018, the case was adjourned to 26.11.2018 at the instance of the counsel for the petitioner. Again the matter was posted to 21.12.2018 for hearing. On which day the matter was again adjourned to 21.01.2019 and then to 22.01.2019, 04.02.2019 and 14.02.2019. Again the matter was adjourned to 08.03.2019 and to 20.03.2019. In the meantime petitioners filed an amendment application and the case was adjourned to 26.03.2019, 27.03.2019 all at the instance of the counsel appearing for the petitioners. The matter was finally heard on 27.03.2019 and taken for orders including the application filed by the petitioners for amendment of the Securitisation Application. From the nature of the amendment sought to be made by the petitioners it could be seen that there is absolutely no bonafides on the part of the petitioners and that the said **OP (DRT).Nos. 74, 75 & 80 of 2019** **9** application is filed without any bonafide and with oblique motives. It is also pertinent to submit that the petitioners have not disputed the equitable mortgage created in favour of the Bank by way of collateral security, in O.A.No.320 of 2018, which itself shows that the amendment application is intended to delay the final disposal of the Securitisation Application. Therefore, the Debts Recovery Tribunal was justified in hearing the amendment application also along with the main case. There is no jurisdictional error or illegality in the procedure adopted by the Debts Recovery Tribunal.” 6. As is clear from the aforementioned averments in the counter affidavit, several postings had been given by the DRT while considering the three Securitisation Applications and interestingly, the matter was heard finally on 27.03.2019 and it is stated by the respondent - Bank that the DRT has now reserved final orders. Pertinently, if the petitioners had a case that their applications for amendment had not been considered by the DRT before that date, they ought to have approached this Court and obtained orders to interdict the final hearing of the Securitisation Applications, so as to seek orders on the amendment applications, if they are so desirous. 7. However, interestingly, even though the Securitisation Applications were heard finally on 27.03.2019, these original petitions have been filed only on 03.05.2019, which is more than a month after the orders were reserved by the DRT on the said Securitisation Applications. Obviously, therefore, it would not be justifiable or prudent for this Court to now come to the aid of the **OP (DRT).Nos. 74, 75 & 80 of 2019** **10** petitioners and direct the DRT not to issue final orders on the Securitisation Applications and to now hear the amendment applications. 8. That apart, the factum of the Securitisation Applications having been heard finally by the DRT on 27.03.2019 not being disputed by the petitioners and since no reply affidavit has been filed contesting the above averments in the counter affidavit, it is needless to say that the petitioners are also aware that final orders on the Securitisation Applications have been reserved along with the orders on their applications for amendment. 9. Obviously, therefore, the petitioners having fully participated in the proceedings before the DRT and having argued the Securitisation Applications on its merits, being fully aware that amendment applications are still pending, it would not be available to them now, more than a month thereafter, to seek that the DRT be directed not to issue final orders in the Securitisation Applications. 10. Be that as it may, the petitioners will certainly get a cause of action to challenge the final order in the Securitisation Applications if it is to their detriment, even on the grounds now impelled in these original petitions and I, therefore, fail to understand why the petitioners must challenge the proceedings **OP (DRT).Nos. 74, 75 & 80 of 2019** **11** before the DRT at this stage before this Court, by filing these original petitions; and they must await final orders in the Securitisation Applications and on the amendment applications and then decide whether they want to take further recourse in law, as may be available to them before the appropriate Forum or before this Court, as they may be advised. In the afore circumstances and in the above perspective, I dismiss these original petitions, since I do not find justification for this Court to intervene at this stage and leave it to the DRT to issue appropriate orders on the Securitisation Applications and the Amendment Applications, as it may deem fit, in terms of law. **Sd/-** ## **DEVAN RAMACHANDRAN** rp **JUDGE** **OP (DRT).Nos. 74, 75 & 80 of 2019** **12** ## **APPENDIX OF OP (DRT) 74/2019** **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 THE TRUE COPY OF SA 318/2018 WITHOUT EXHIBITS IN THE FILE OF DEBT RECOVERY TRIBUNAL-2, ERNAKULAM. EXHIBIT P2 THE TRUE COPY OF THE SAID IA NO. 536/2019 FOR AMENDMENT. EXHIBIT P3 THE TRUE COPY OF THE IA NO. 566/2019 FOR AMENDMENT. EXHIBIT P4 THE TRUE COPY OF THE A DIARY PROCEEDINGS FROM 14.2.2019 TO 27.3.2019. EXHIBIT P5 THE TRUE COPY OF THE ORDER DATED 27.3.2019 AS APPEARED IN THE A DIARY.** **OP (DRT).Nos. 74, 75 & 80 of 2019** **13** ## **APPENDIX OF OP (DRT) 80/2019** **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 THE TRUE COPY OF SA 310/2018(WITHOUT EXHIBITS)IN THE FILE OF SA REC0VERY TRIBUNAL-2 ERNAKULAM. EXHIBIT P2 THE TRUE COPY OF THE I.A.NO.535/2019 FOR AMENDMENT. EXHIBIT P3 THE TRUE COPY I.A.NO.565/2019 FOR AMENDMENT. EXHIBIT P4 THE TRUE COPY OF THE A DIARY PROCEEDINGS FROM 14.2.2019 TO 26.3.2019. EXHIBIT P5 THE TRUE COPY OF THE ORDER DATED 27.3.2019 AS APPEARED IN THE A DIARY** **OP (DRT).Nos. 74, 75 & 80 of 2019** **14** ## **APPENDIX OF OP (DRT) 75/2019** **PETITIONER'S/S EXHIBITS: EXHIBIT P1 THE TRUE COPY OF SA 309/2019(WITHOUT ANNEXURES)IN THE FILE OF DEBT RECOVERY TRIBUNAL-2 ERNAKULAM. EXHIBIT P2 THE TRUE COPY OF THE IA NO.534/2019 FILED BY PETITIONERS FOR AMENDMENT OF SA. EXHIBIT P3 THE TRUE COPY OF COUNTER AFFIDAVIT DATED 18.3.2019 FILED BY STATE BANK OF INDIA. EXHIBIT P4 THE TRUE COPY OF THEA DIARY PROCEEDINGS FROM 14.02.2019 TO 26.03.2019. EXHIBIT P5 THE TRUE COPY OF THE ORDER DATED 27.03.2019 AS APPEARED IN THE A DIARY IN DEBT RECOVERY TRIBUNAL-2 ERNAKULAM.**