High Court of KeralaSingle Judge2024-02-19Writ petition disposed of with directions to co...

Sheela K.P. v. Indian Bank, Guruvayoor & Avinash T.S.

Case / Petition Number:WP(C) No.27746 of 2023

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: N. Nagareesh
Judgment Date: 2024-02-19
Court Decision / Holding: Writ petition disposed of directing the 1st respondent-Bank to consider Ext.P6 objection submitted by the petitioner and take an appropriate decision thereon in accordance with law, within two weeks. Sale/confirmation of sale, if any, shall be deferred till the Bank takes a decision after giving the petitioner an opportunity of hearing.
Final Disposition: Writ petition disposed of with directions to consider Ext.P6 objection within two weeks and defer sale/confirmation pending decision after hearing; objective is to ensure due process under SARFAESI.

Parties to the Case

Appellants / Petitioners

Sheela K.P.

Respondents

Indian Bank, Guruvayoor represented by its Authorized Officer, Branch Manager
Avinash T.S.

Legal Representation & Advocates

Counsels for Petitioners

• K. Sujai Sathian
• Deepa Narayanan
• Gouri Meempat
• Mary Liya Sabu
• Sangeetha Sreekumar
• Preethi P.V.
• M.V. Balagopal

Counsels for Respondents

• S. Eswaran, Standing Counsel

Case Synopsis & Summary

The petitioner, Sheela K.P., owns a property comprising 16 cents of land and a 2000 square-foot building in Pookode Village, Thrissur. In 2016, she availed an overdraft of ₹14.5 lakh from the Indian Bank to start a garment business, with her late husband as personal guarantor and the property as security in joint ownership. After the husband’s death in 2017, his share devolved to the petitioner, making her the majority owner. The bank took over loan matters and permitted further borrowings on the 2nd respondent’s instructions. To recover liabilities, the bank sold a portion of another property and appropriated the proceeds for personal use, a fact the petitioner learned of only after receiving a possession notice. She contends that prior notices were not communicated to her and that the loans were in default without her knowledge. The petition challenges the SARFAESI sale process, alleging the bank intends to auction the entire security at a high reserve price for a debt of around ₹23.5 lakh, which she argues is unjust. Ext.P6 objection was submitted but not considered. The court underscores that while SARFAESI sales are permissible, due process requires hearing and consideration of objections; it cites a prior principle that banks should not sell the entire security and should act prudently. The court disposes of the petition by directing the bank to consider Ext.P6 within two weeks and to defer sale/confirmation until a decision is taken after a hearing.

Provisions of Law Cited

Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI)

Legal Doctrines & Maxims

Opportunity of hearing (audi alteram partem)
Natural justice / due process
Proportionality in sale under SARFAESI (only extent necessary to satisfy debt)

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner asserts she had no knowledge of the loan defaults before the accounts turned NPA and that the bank issued notices only to the 2nd respondent, leading to her ouster from home. She argues that due process under SARFAESI requires the bank to give proper notice and an opportunity of hearing before sale, and that Ext.P6 objections must be considered prior to sale or confirmation. She contends the bank plans to auction the entire security at an inflated reserve price for a modest debt, which is unjust and unlawful.

Contentions of Respondents

The bank contends the outstanding amount exceeds ₹23 lakh, and despite requests, the petitioner did not pay. It asserts the writ petition lacks merit and that sale proceedings under SARFAESI are lawful; the bank claims previous notices were served on the 2nd respondent and disputes the petitioner's allegations.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
S. Anilkumar v. Catholic Syrian Bank Ltd., Palakkad and another	2013 (2) KHC 641	Positive	Cited as authority for prudent SARFAESI procedure; supports the proposition that sale should be proportionate and that due process must be followed, including hearing and consideration of objections.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE N.NAGARESH** **MONDAY, THE 19[TH] DAY OF FEBRUARY 2024 / 30TH MAGHA, 1945** ## **WP(C) NO. 27746 OF 2023** ## **PETITIONER:** **SHEELA K.P., AGED 56 YEARS, W/O.SUGATHAN LATE, THANAPARAMBIL HOUSE, THAMARAYUR, KOTTAPADI, GURUVAYOOR, PIN – 680505.** **BY ADVS. K.SUJAI SATHIAN DEEPA NARAYANAN GOURI MEEMPAT MARY LIYA SABU SANGEETHA SREEKUMAR PREETHI. P.V. M.V.BALAGOPAL** ## **RESPONDENTS:** - **1 INDIAN BANK, GURUVAYOOR REPRESENTED BY ITS AUTHORIZED OFFICER, THE BRANCH MANAGER, 10/340 EAST NADA HOTEL ELITE BUILDING, GURUVAYOOR, THRISSUR, PIN – 680101.** - **2 AVINASH T.S., AGED 28 YEARS, S/O.SUGATHAN (LATE), THANAPARAMBIL HOUSE, THAMARAYUR, KOTTAPADI, GURUVAYOOR, PIN – 680505.** **BY ADV.SRI.S.ESWARAN, STANDING COUNSEL** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 19.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **W.P.(C) No.27746 of 2023** **==> picture [13 x 10] intentionally omitted <==** ## **J U D G M E N T** Dated this the 19[th] day of February, 2024 The petitioner is the owner of a property of 16 Cents of land and 2000 Square Feet building in Pookode Village, Chavakkad Taluk, Thrissur in Re-Survey No.104/2A. On 21.03.2016, the petitioner obtained an overdraft of ₹14,50,000/- from the respondent-Bank in order to start a Garment business called M/s.Appus Textiles along with her husband. The loan was taken in her name since she was named as the sole Proprietor of the Textiles, with the personal guarantee of her late husband and on the security of the property in which the petitioner and her spouse had joint ownership. It was valued by the 1[st] respondent-Bank at the time of sanctioning of the overdraft ## **W.P.(C) No.27746 of 2023** **==> picture [13 x 10] intentionally omitted <==** at ₹1.21 Crores as Market value and ₹99.50 lakhs as Reserve Value. 2. The petitioner's husband died on September 5, 2017 as a result of acute illnesses. On the demise of the petitioner's husband, his portion of the property devolved equally between the petitioner, her son Mr. Avinash TS, and her daughter Mrs. Gopikalakshmi TS, making the petitioner the majority shareholder of the property. Following that the 2[nd ] respondent took over all loan related matters and additional loans were taken on his instructions. 3. To pay off all the liabilities, the 2[nd] respondent was entrusted to sell a portion of another property owned by the petitioner and her late husband. Subsequently, the 2[nd] respondent sold the property and utilized the sale amount for his own personal purposes. From the day that ## **W.P.(C) No.27746 of 2023** **==> picture [13 x 10] intentionally omitted <==** the petitioner got knowledge of the same, her relations with the 2[nd] respondent turned sour and she was ousted from her own home by the 2[nd] respondent and a number of criminal cases were filed between the parties and these cases are pending before the Judicial First Class Magistrate's Court, Chavakkad. The petitioner was not aware of the proceedings initiated by the Bank and of the fact that these loans were in default. It was on receipt of the possession notice that the petitioner became aware of these loans and on enquiry with the Bank, she was intimated that all the previous notices were served on the 2[nd] respondent. 4. Though as per Ext.P4 it is stated that the petitioner was issued a demand notice on 30.03.2023, she has not received any information preceding the possession notice. Hence, she wasn't given the opportunity to make ## **W.P.(C) No.27746 of 2023** **==> picture [13 x 9] intentionally omitted <==** objections to the proceedings initiated by the Bank. The subsequent intimation regarding these loans was the notice of sale that was sent to the petitioner on 10.07.2023. The date on which any of these loan accounts fell due or became NPA is not known to the petitioner. It is settled principle in law that while a Bank is initiating sale of property under the SARFAESI Act, it need only sell such extent of the property that is essential to satisfy the debt and not the entire extent of the security. 5. This Court has held the same to be the prudent procedure under the SARFAESI Act in **S. Anilkumar v. Catholic Syrian Bank Ltd., Palakkad and another** [2013 (2) KHC 641]. The manifest injustice stated above was noticed by the petitioner only on receipt of Exts.P4 and P5 notices and it is relevant to submit that in a loan due for ₹23,57,319/-, the Bank is initiating to sell the ## **W.P.(C) No.27746 of 2023** **==> picture [13 x 10] intentionally omitted <==** petitioner's entire property for a reserve price of ₹1,16,82,000/-. The petitioner sent Ext.P6 objection to the above proceedings, which has not been considered yet. The petitioner is highly aggrieved by Ext.P5 notice. 6. Counsel for the petitioner submits that the petitioner has submitted Ext.P6 objection and the Bank is bound to consider the said objection before effecting or confirming the sale. 7. Standing Counsel entered appearance and resisted the writ petition. The Standing Counsel submitted that the total outstanding amount payable by the petitioner exceeds ₹23 lakhs. In spite of repeated requests, the petitioner has failed to pay the amount. In the circumstances, the writ petition is without any merit. 8. Taking into consideration the facts, I am of the opinion that the writ petition can be disposed of directing ## **W.P.(C) No.27746 of 2023** **==> picture [13 x 9] intentionally omitted <==** the respondents to consider the objection raised by the petitioner. In the facts of the case, the writ petition is disposed of directing the 1[st] respondent-Bank to consider Ext.P6 objection submitted by the petitioner and take appropriate decision thereon in accordance with law. This shall be done within a period of two weeks. Sale / confirmation of sale, if any proposed, shall stand deferred till the Bank takes a decision after giving opportunity of hearing to the petitioner. Sd/- **N. NAGARESH JUDGE** ams ## **W.P.(C) No.27746 of 2023** :8: ## **APPENDIX OF WP(C) 27746/2023** **PETITIONER'S EXHIBITS Exhibit P 1 THE TRUE COPY OF THE SANCTION TICKET OF A/C NO. 6420793757 DATED 21/3/2016 Exhibit P2 THE TRUE COPY OF SANCTION TICKET OF A/C NO 6985198870 DATED 15/2/2021 Exhibit P3 THE TRUE COPY OF SANCTION TICKET OF A/C NO 7182237511 DATED 19/3/2022 Exhibit P4 THE TRUE COPY OF THE POSSESSION NOTICE DATED 8/6/2023 Exhibit P5 THE TRUE COPY OF THE NOTICE OF INTENDED SALE DATED 10/7/2023 Exhibit P6 THE TRUE COPY OF THE OBJECTION TO RESPONDENT DATED 9/8/2023**