State Bank of Travancore Stressed Assets Resolution Centre (SARC) v. Kiran V. and Suma Benjee V Eramattathathil

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON TUESDAY, THE 11TH DAY OF MARCH 2014/20TH PHALGUNA, 1935 WP(C).No. 3772 of 2014 (V) --------------------------- AGAINST THE ORDER/JUDGMENT IN CMP 2076/2013 of C.J.M.,KOTTAYAM DATED 12-09-2013 PETITIONER(S): --------------- STATE BANK OF TRAVNACORE STRESSED ASSETS RESOLUTION CENTRE (SARC) REPRESENTED BY CHIEF MANAGER AND AUTHORIZED OFFICER STATE BANK OF TRAVANCORE, ZONAL OFFICE, KOTTAYAM. BY ADVS.SRI.SATHISH NINAN SRI.SANTHOSH MATHEW RESPONDENT(S): --------------- 1. KIRAN V S/O E.G.VASUDEVAN, ERAMATTATHIL, MARIAPALLY P.O. PIN:686 013, KOTTAYAM DISTRICT. 2. SUMA BENJEEV ERAMATTATHIL, KUMARAKOM P.O., PIN:686563 KOTTAYAM DISTRICT. R2 BY ADV. SMT.A.G.ANEETHA R2 BY ADV. SMT.M.KABANI DINESH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11-03-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 3772 of 2014 (V) --------------------------- APPENDIX PETITIONER(S)' EXHIBITS ------------------------- EXHIBIT P1: TRUE COPY OF THE PETITION - CMP NO.2076/2013 DATED 12.9.2013 FILED BY THE BANK BEFORE THE CHIEF JUDICIAL MAGISTRATE COURT, KOTTAYAM. EXHIBIT P3: TRUE COPY OF THE ORDER DATED 20.11.2013 OF THE CHIEF JUDICIAL MAGISTRATE COURT, KOTTAYAM, APPOINTING ADV.UMA S NAIR AS THE COMMISSIONER. EXHIBIT P3: TRUE COPY OF THE LETTER SENT TO THE COMMISSIONER BY THE 2ND RESPONDENT. EXHIBIT P4: TRUE COPY OF THE MAHAZAR PREPARED BY THE ADVOCATE COMMISSIONER DATED 11.12.2013. EXHIBIT P5: TRUE COPY OF THE REPORT DATED 18.12.2013 SUBMITTED BY THE ADVOCATE COMMISSIONER BEFORE THE CHIEF JUDICIAL MAGISTRATE COURT, KOTTAYAM. EXHIBIT P6: TRUE COPY OF THE PETITION FILED BY THE PETITIONER BEFORE THE CHIEF JUDICIAL MAGISTRATE COURT, KOTTAYAM IN CMP NO.2076/2013. EXHIBIT P7: TRUE COPY OF THE EXTRACT OF THE ORDER-SHEET IN CMP NO.2076/2013 DATED 2.1.2014. RESPONDENT(S)' EXHIBITS ------------------------ NIL /TRUE COPY/ P.S. TO JUDGE sl. ## **P.R. RAMACHANDRA MENON, J.** ======================== W.P.(C). No. 3772 of 2014 -------------------------------------------Dated this the 11th day of March, 2014 ## **JUDGMENT** Ext. P7 order passed by the Additional Chief Judicial Magistrate, Kottayam on 02.01.2014 closing the petition filed by the petitioner Bank under Section 14 of the SARFAESI Act, on receipt of the report of the Advocate Commissioner, without causing the property to be physically taken over by the petitioner Bank, in spite of Ext.P2 order dated 20.11.2013 appointing an Advocate Commissioner to take over the physical possession, also with the assistance of police, if necessary, is the subject matter of challenge in this writ petition. 2. The case of the petitioner Bank is that, first respondent had availed some financial assistance from the respondent Bank on the strength of the security interest created over the property stated as being owned, possessed and enjoyed by him. Since the repayment was not effected, the account was declared as 'NPA' and the Bank proceeded with steps under the SARFAESI Act, also filing Ext.P1 petition under Section 14 of the SARFAESI Act dated W.P.C. No. 3772 of 2014 -2- 12.09.2013, supported by an affidavit before the concerned Chief Judicial Magistrate's Court. After considering the matter, Ext.P2 order was passed by the learned Magistrate appointing Smt. Uma S Nair as Advocate Commissioner to take possession of the secured assets/properties under Section 14 of the SARFAESI Act with assistance of Police. The Commissioner found that the second respondent was residing in the building who gave Ext.P3 statement as to the facts and figures, claiming title over the property. It was in the said circumstance that the Commissioner prepared Ext.P4 Mahazar and filed Ext.P5 report pointing out that the physical possession of the property could not be taken over. In the said circumstance, the petitioner Bank filed Ext.P6 petition to direct the Commissioner to break open the lock and to take physical possession, also referring to the proper course to be pursued, as declared by this Court vide judgment in W.P.(C). No. 25919 of 2013. Despite this, the petition was simply 'closed' by the learned Magistrate, observing that the Commissioner had filed the report, and this in turn is challenged in this writ petition. 3. On pointing that the learned Magistrate was pursuing W.P.C. No. 3772 of 2014 -3- similar course almost in all similar cases, an interim order was passed by this Court on 06.02.2014 in the following terms: “Urgent notice on admission to the respondents by speed post returnable within two weeks. 2. It is seen from Ext. P5 interim report submitted by the Advocate Commissioner under Section 14 of the SARFAESI Act that the person who is residing in the property/secured premises objected to eviction proceedings, which made the Advocate Commissioner to retreat and submit Ext. P5 interim report before the Chief Judicial Magistrate, Kottayam. It appears from the proceedings sheet of the learned Magistrate, as borne by Ext. P7, that the proceedings were closed by the Magistrate, recording the report of the Commissioner on 02.01.2014. 3. The Registry shall obtain a report from the learned Magistrate as to the course and events, especially when Ext. P5 is only an interim report and the proceedings have not been taken to logical conclusion in terms of the mandate under Section 14 of the SARFAESI Act. This is more so, in view of the submission made by the learned counsel for the petitioner across the Bar that a similar report was called from the very same learned Magistrate earlier in W.P.(C) No. 7646 of 2013, involving similar W.P.C. No. 3772 of 2014 -4- circumstance. Post along with the Judge's papers in W.P. (C) No. 7646 of 2013 after two weeks.” 4. Pursuant to this, a report bearing No. 820/2014 dated 15.02.2014 has been submitted by the learned Magistrate, the operative portion, as given in the last paragraph, reads as follows: “When the case was taken, I found that the petitioner has not complied the mandatory provisions U/s 14 1(a) of the amended Act. The petition was filed after enactment of Act 1/2013 and the petitioner shall file an affidavit specifying the mandatory requirements under the amended Act. Since it is a mandatory provision, the petition itself was not maintainable. I disclosed those matter to the petitioners counsel and directed him to file a fresh application complying the provisions of the amended Act. The petition was closed on that ground. I may submit this report for favour of necessary direction.” 5. The learned counsel for the petitioner submits that the version of the learned Magistrate is not correct, in view of the fact that, under almost similar circumstances, exactly similar course was being pursued and the same has been deprecated by this Court as per judgments in W.P.(C). No. 7646/2013, W.P.(C). No. 25919 of 2013 and such other cases. W.P.C. No. 3772 of 2014 -5- 6. Despite the completion of service of notice, the first respondent has not chosen to appear before this Court. The second respondent has entered appearance and has filed a detailed counter affidavit contending that, she is residing with her children in the building for more than 17 years and that the property concerned was orally instructed to be earmarked as the share of her husband, he being the younger son of the deceased father-in-law. The first respondent is none other than the son of the elder brother of the deceased Husband of the petitioner. A bogus Partition deed was created among the concerned persons including the first respondent, without the involvement of the deceased husband, who expired only in the year 2011. The father-in-law expired in the year 2008 and the Partition deed is stated as executed only on 5.5.2008. There could not have been any such Partition deed, without the second petitioner's husband in the party array, submits the learned counsel. 7. The rights and liberties of the parties concerned do not form the subject matter of consideration in this writ petition. If the second respondent is aggrieved of the steps being taken by the Bank, it is always open for the said respondent to pursue the W.P.C. No. 3772 of 2014 -6- matter by way of appropriate proceedings, before the appropriate forum in accordance with law. The only question to be considered is, whether the course pursued by the learned Magistrate under Section 14 of the SARFAESI Act is correct or not. It has been declared by this Court on many an occasion that, on filing a petition under Section 14 of the 'Act' and on satisfying the requirements, the physical possession of the property is liable to be taken over. There was no doubt in the minds of the learned Magistrate as well and it was accordingly, that Ext.P2 order was passed on 20.11.2013 appointing an Advocate Commissioner, and directing to take over the physical possession of the property, with assistance of the Police, if necessary. The course pursued by the Advocate Commissioner, as discernible from Ext.P4 and P5, reveals that physical possession of the property was not taken over. This being the position, it was not correct or proper for the learned Magistrate, to have the petition closed, by passing Ext.P7 order. 8. It is however brought to the notice of this Court, as per the report submitted by the learned Magistrate that, the Magistrate had instructed the learned counsel for the Bank (who W.P.C. No. 3772 of 2014 -7- appeared before him) to submit a proper petition in terms of the amendment brought about under Section 14 1(a) with effect from 15.1.2013. As per said amendment, application under Section 14 had to be supported by an affidavit containing all the relevant particulars. Eventhough an affidavit has been filed in support of Ext.P1 application, the said affidavit does not contain the factual particulars which ought to have been given by the petitioner Bank in the said affidavit Itself. In the said circumstance, the learned counsel for the petitioner submits that the petitioner would submit a proper petition with supporting affidavit, pointing out all the factual particulars and that the matter could be disposed of accordingly. 9. In the said circumstance, the petitioner Bank is set at liberty to file a proper petition in terms of Section 14(1) of the SARFAESI Act before the learned Magistrate, which in turn shall be considered and appropriate orders shall be passed in accordance with law, for taking over the physical possession of the property. It is also made clear that, this will not bar the way of the second respondent in proceeding with appropriate steps in accordance with law before the appropriate forum, if she is W.P.C. No. 3772 of 2014 -8- having any rights or interests over the property, as claimed. If any such petition is filed, it will be for the learned Magistrate to consider and pass appropriate orders also in the light of the law declared by the Apex Court as per the decision reported in **Standard Chattered Bank v. Noble Kumar and Others** [ **2013 (9) SCC 620** ], particularly with reference to paragraphs 23 to 25 therein. The writ petition is disposed of. ## **P.R. RAMACHANDRA MENON, JUDGE.** kp/-