SHAJAHAN S/O. ABOOBAKKAR v THE URBAN CO-OPERATIVE BANK LTD AND 2 OTHERS

W.P.(C) No. 11393/2019 : 1 : IN THE HIGH COURT OF KERALA AT ERNAKULAM ## PRESENT THE HONOURABLE MR. JUSTICE SHAJI P.CHALY MONDAY, THE 9[TH] DAY OF JANUARY 2023 / 19TH POUSHA, 1944 ## WP(C) NO. 11393 OF 2019 ## PETITIONER/S: SHAJAHAN S/O. ABOOBAKKAR, MUCHIRIKKOTTIL HOUSE, PONNYARKURSSI P. O., PERINTHALMANNA – 679 322. BY ADVS. M.P.ASHOK KUMAR SRI.P.C.GOPINATH SMT.BINDU SREEDHAR SHRI.ASIF N ## RESPONDENT/S: - 1 THE URBAN CO-OPERATIVE BANK LTD. REPRESENTED BY SECRETARY, PERINTHALMANNA – 679 322. - 2 THE AUTHORISED OFFICER THE URBAN CO-OPERATIVE BANK LTD., PERINTHALMANNA - 679 322 - 3 MANIKANDAN, D/O. RAMAN KUTTY, THEKKINKATTIL HOUSE, ANAMANGAD P. O., PERINTHALMANNA, MALAPPURAM – 679 357. BY ADV SRI.U.K.DEVIDAS THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09.01.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) No. 11393/2019 : 2 : ## **SHAJI P. CHALY, J.** --------------------------------------------------------W.P.(C). No. 11393 of 2019 --------------------------------------------------------Dated this the 9[th] day of January, 2023. ## The petitioner has filed this writ petition seeking the following reliefs: - 1) Call for the documents leading to Exhibit P7 from the office of the first respondent. - 2) Issue a writ of mandamus or other appropriate writ or order commanding the 1[st] and 2[nd] respondent not to initiate any action for taking possession of petitioner’s property situated in Sy. No. 6/13/1 in Anamangad Village, Perinthalmanna. - 3) Declare that the 1[st] respondent Bank cannot attach or take possession of the petitioner’s property situated in Sy. No. 6/13/1 in Anamangad Village as he purchased the property on the strength of valid documents. - 4) Declare that the petitioner has got every right to enjoy his property situated in Sy. No. 6/13/1 in Anamangad Village and the 1[st] respondent cannot disturb the petitioner in any manner from enjoying his property as he was not a borrower or a guarantor of loan from the first respondent Bank. - 5) Set aside all recovery proceedings initiated by the first and 2[nd] respondent against the property owned by the petitioner situated in Sy. No. 6/13/1 in Anamangad Village, Perinthalmanna. 2. The basic material facts for the disposal of the writ petition are as follows: The third respondent namely Manikandan borrowed a sum of W.P.(C) No. 11393/2019 : 3 : Rs.3,25,000/- from one Ummer, Perinthalmanna Taluk. When the 3[rd] respondent defaulted repayment, Sri. Ummer filed O.S. No. 90 of 2008 before the Sub Court, Manjeri and the suit was decreed ex parte, as is evident from Exhibit P1 ex parte decree. The decree holder filed E.P. No. 37 of 2011 in O.S. No. 90 of 2008 before the Sub Court, Manjeri. In the said Execution Petition, the third respondent’s property and residential house situated in survey No. 6/13/1 was attached and sold in court auction. The order in E.P. No. 184/2012 in E.P. No. 37 of 2011 in O. S. No. 90 of 2008 is produced as Exhibit P2. The decree holder Sri. Ummer purchased the property and the house in the court auction. The sale was confirmed as per Exhibit P3 order dated 13.08.2012 by the civil court. On 15.01.2013, the said property was handed over to the auction purchaser as per Ext. P4 mahazar. Sri. Ummer who purchased the property, gifted the property and house to one Rahim by a gift deed, as is evident from Exhibit P5 dated 21.08.2013. Later, Sri. Rahim sold the property to one Mr. Assainar by assignment deed No. 2073 dated 07.04.2014, as is evident from Exhibit P6. 3. Sri. Assainar sold the property to the petitioner as per Exhibit P7 document No. 2828 dated 10.07.2018. According to the petitioner, the property was purchased by him after verifying the previous records, including the certificate of encumbrance for the W.P.(C) No. 11393/2019 : 4 : period from 01.01.2005 to 15.10.2018 and since no encumbrance was recorded in Exhibit P8 encumbrance certificate dated 17.10.2018, he is a bona fide purchaser. While so, the Urban Cooperative Bank Ltd., Perintalmanna, respondent No.1, has filed Exhibit P9 application under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002’ for short) before the Chief Judicial Magistrate, Manjeri. It is challenging the Exhibit P9 application submitted by the first respondent, this writ petition is filed. 4. The case projected by the petitioner is that the property in question was originally sold consequent to a decree passed by the competent civil court and effected delivery in terms of the provisions of the Order XXI Rule 95 of CPC. Therefore, it is contended that the property purchased in a court auction and the delivery effected in terms of the provisions of the Code of Civil Procedure is not liable to be proceeded as per the provisions of the SARFAESI Act, 2002. 5. On the other hand, the contentions put forth by the first respondent Bank is that the third respondent Manikandan has availed an amount of Rs.6,00,000/- as loan from the bank in the year 2006 and the liability of the third respondent as on 28.02.2019 W.P.(C) No. 11393/2019 : 5 : is Rs.18,65,249/-. It is also the case of the Bank that the third respondent has created an equitable mortgage with the Bank by depositing the original title deeds. 6. It is further pointed out that the originals of the documents are with the Bank and the Bank has first charge on the secured assets. It is further submitted that the Bank was not made a party neither in O.S. No. 90 of 2008 nor in the Execution Petition and the Execution Application specified above. 7. It is the further contention of the Bank that the third respondent and others colluded each other and cheated the respondent Bank. The third respondent remained ex parte in the suit before the civil court and the auction of the secured asset was made for a meager amount of Rs.4,41,000/-. It is further submitted that Sri. Ummer himself again purchased the property and created Exhibit P5 gift deed in favour of his son. The same is also for the purpose of defeating the interest of the Bank by the third respondent and Sri. Ummer. 8. Anyhow, the Bank has proceeded against the secured asset of 36 cents of land and a residential house bearing No.A. P 1/16. The respondent Bank has initiated proceedings under the SARFAESI Act, 2002 in 2017, and Exhibit P9 petition was filed on 17.10.2017 under Section of the Act 2002. However, the petitioner purchased W.P.(C) No. 11393/2019 : 6 : the property as per Exhibit P7 sale deed dated 10.07.2018 only. The contention of the respondent Bank is that the petitioner has no locus standi to challenge Exhibit P9 proceedings. It is further pointed out that the writ petition itself is not maintainable under law, in view of the provisions of the SARFAESI Act, 2002. 9. The learned counsel for the Bank has also submitted that the Bank has initiated the proceedings in terms of Section 13 of the SARFAESI Act, 2002. Sub-Section (1) thereto specifies that notwithstanding anything contained in Section 69 or Section 69A of the Transfer of Property Act, 1882, any security interest created in favour of any secured creditor may be enforced, without the intervention of the court or tribunal, by such creditor in accordance with the provisions of the Act. The SARFAESI Act, 2002 is a self contained statute, by which if any person is aggrieved by any action taken by the Bank in accordance with the provisions of the SARFAESI Act, 2002, the person aggrieved is to necessarily take steps in terms of the provisions of the Act. Above all, a mortgage by deposit of title deeds, with intent to create a security as provided under Section 55(f) of the Transfer of Property Act, 1882 (‘Act, 1882’ for short) does not require registration, if it is done within the towns notified by the State Government. This is very explicit from Section 59 of the Act 1882, dealing with ‘mortgage when to be W.P.(C) No. 11393/2019 : 7 : assurance’; which specifies that, where the principal money secured is one hundred rupees or upwards, a mortgage, other than a mortgage by deposit of title deeds, can be effected only by a registered instrument signed by the mortgagor and attested by at least two witnesses. The State of Kerala has issued a notification bearing SRO No. 1002 of 2010 dated 2.11.2010 exercising the powers conferred under Section 58(f) of the Act 1882, by which all Corporations, Municipalities, and Panchayats in the State of Kerala were notified to satisfy the requirements of the said provision. The legality of the said notification was upheld by a Division Bench of this court (to which I am a party) in the judgment in _**Pradeep Kumar V State of Kerala**_ , [2022 (2) KLT Online 1189]. 10. Therefore, in my considered view, when a straightforward remedy is available to the aggrieved person by virtue of the provisions of the SARFAESI Act, 2002 by approaching a Debt Recovery Tribunal, the petitioner has to resort to the same. This is a case where after issuing notice under Section 13 of the SARFAESI Act, 2002, the Bank has initiated action under Section 14 of the SARFAESI Act, 2002 before the Chief Judicial Magistrate Court, Manjeri to take possession of the property, which is a statutory remedy available to the Bank. Above all, by now, it is well settled by a catena of decisions of the Apex Court that a writ petition is not W.P.(C) No. 11393/2019 : 8 : maintainable against the proceedings under the SARFAESI Act, 2002 normally and ordinarily. [See the judgments in _**Phoenix Arc Private Limited vs Vishwa Bharati Vidya Mandir**_ (Civil Appeal Nos. 257-259 of 2022 dated 12.01.2022], _**Y. Sleebachan v. State of Kerala and others**_ [2020 (4) KLT Online 1024], _**Federal Bank v Sagar Thomas**_ (2003) 10 SCC 733), _**United Bank of India v. Satyavati Tandon and Others**_ [AIR 2010 SC 3413], _**Authorised Officer, State Bank of Tranvancore v. K.C.Mathew**_ [(2018) 3 SCC 85 and **Varimadugu Obi Reddy v. B. Sreenivasulu and Ors.** [MANU/SC/1495/2022]. 11. Anyhow, the learned counsel for the petitioner Sri.M.P. Ashok Kumar, at that point of time, submitted that the liberty of the petitioner to approach the Tribunal may be left open. I am also of the view that merely because an application is submitted by the Bank before the Chief Judicial Magistrate Court, to take possession of the property, that by itself cannot be termed as an order to the aggrievement of the petitioner, since no orders are passed by the Chief Judicial Magistrate, to take possession of the property. Anyhow, since the petitioner seeks permission of this Court to approach the Tribunal in accordance with law, I think, it is only appropriate that the writ petition is disposed of with suitable directions; W.P.(C) No. 11393/2019 : 9 : 12. Therefore, after having heard the learned counsel for the petitioner Sri. M.P.Ashok Kumar and Sri. U.K. Devidas, the learned counsel appearing for the Bank and perusing the pleadings and materials on record, this writ petition is disposed of, leaving open the liberty of the petitioner to approach the Tribunal, if so advised, and in accordance with law. 13. When the writ petition was admitted to the files of this Court on 21.05.2019, an interim order of stay was granted against the proceedings pertaining to Exhibit P9 application submitted by the Bank before the Chief Judicial Magistrate Court. Anyhow, these are all matters to be considered by the Tribunal if and when the petitioner submits an application against the proceedings initiated by the Bank under Section 13 of the SARFAESI Act, 2002. All the questions of law and facts are left open. Writ petition is disposed of accordingly. sd/- **SHAJI P. CHALY, JUDGE.** Rv W.P.(C) No. 11393/2019 : 10 : ## APPENDIX OF WP(C) 11393/2019 ## PETITIONER’S EXHIBITS: EXHIBIT P1 PHOTOCOPY OF THE DECREE IN OS 90/2008 EXHIBIT P2 PHOTOCOPY OF THE ORDER IN EP 184/2012 IN EP 37/2011 IN OS 90/2008 DATED 17.01.2013 EXHIBIT P3 PHOTOCOPY OF THE SALE DEED EXECUTED ON 13.08.2012 EXHIBIT P4 PHOTOCOPY OF THE MAHAZAR SHOWING THE HANDING OVER OF THE PROPERTY. EXHIBIT P5 PHOTOCOPY OF THE GIFT DEED DATED 21.08.2013 EXHIBIT P6 PHOTOCOPY OF THE ASSIGNMENT DEED NO.2073 DATED 07.04.2014. EXHIBIT P7 PHOTOCOPY OF THE SALE DEED DATED 10.07.2018. EXHIBIT P8 PHOTOCOPY OF THE CERTIFICATE OF ENCUMBRANCE ON PROPERTY DATED 17.10.2018. EXHIBIT P9 PHOTOCOPY OF THE CMP 2925 OF 2017 PENDING BEFORE THE CHIEF JUDICIAL MAGISTRATE COURT, MANJERI. ## RESPONDENTS’ EXHIBITS: NIL True Copy rv PS to Judge.