Stephen Bernard v. State Bank of India

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE C.S.DIAS** **TUESDAY, THE 11[TH] DAY OF JULY 2023 / 20TH ASHADHA, 1945** **WP(C) NO. 10437 OF 2023** ## **PETITIONER/S:** STEPHEN BERNARD, AGED 71 YEARS PROPRIETOR, M/S. STEPHEN BERNARD CONSTRUCTION COMPANY, ROBIN DALE, PADINJARE KADAVIL, VELLIMON WEST P.O., KOLLAM., PIN - 691511 BY ADVS. LIJU.V.STEPHEN INDU SUSAN JACOB P.M.HRIDYA ## **RESPONDENT/S:** STATE BANK OF INDIA, KUNDARA MAIN BRANCH, REPRESENTED BY ITS CHIEF MANAGER, KUNDARA BRANCH, KERALA, KOLLAM., PIN - 691501 ## **OTHER PRESENT:** SRI JAWAHAR JOSE THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11.07.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 10437 OF 2023 2 ## **JUDGMENT** The writ petition is filed challenging Ext.P10 order dated 30.08.2018 passed by the Debt Recovery Appellate Tribunal, Chennai (in short, 'Appellate Tribunal') and Ext.P19 order dated 04.01.2023 passed by the Debt Recovery Tribunal-II, Ernakulam ('Tribunal', in short). 2. The brief relevant facts leading to Exts.P10 and P19 orders are as follows: - (i) The petitioner is a Central Government Contractor and had undertaken major works. - (ii) The petitioner had availed financial assistance from the respondent bank during the period 2012-2015. - (iii) The bank has proceeded against the secured assets under the the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in WP(C) NO. 10437 OF 2023 3 short, 'Act') by filing MC. No.248/2017 before the Chief Judicial Magistrate Court, Kollam. - (iv) The mandatory notice under Section 13 (2) of the Act was not served on the petitioner. Although the petitioner filed his objection to the application, the learned Magistrate has rejected the objection and permitted the bank to take possession of the secured asset by ExtP6 order. - (v) The petitioner filed S.A. No.244/2017 before the Tribunal, challenging Ext.P6 order passed by the learned Magistrate. - (vi) The Tribunal, without considering the factual and legal contentions, has dismissed S.A. No.244/2017. - (vii) Challenging the said order, the petitioner preferred AIR(SA) No.268/2018 before the Appellate Tribunal. WP(C) NO. 10437 OF 2023 4 - (viii) The Appellate Tribunal passed a conditional order, directing the petitioner to remit an amount of Rs.1.50/-Crore on or before 30.08.2018, to entertain the appeal. - (ix) On finding its own illegalities, the respondent agreed to settle the dispute with the petitioner for an amount of Rs.2,87,40,530/- under the One Time Settlement (OTS) Scheme. Consequently, the petitioner did not pursue the appeal before the Appellate Tribunal. - (x) In pursuance of the consensus arrived at between the parties, the petitioner deposited an amount of Rs.15,00,000/- as per the OTS Scheme. But, he could not pay the 2[nd] installment on time. - (xi) Immediately, the respondent cancelled the OTS Scheme and surged ahead with the recovery proceedings. WP(C) NO. 10437 OF 2023 5 - (xii) The petitioner preferred WP(C) No.15036/2019 before this Court. By Ext.P11 judgment, this Court once again permitted the petitioner to approach the respondent bank to avail the OTS Scheme. - (xiii) Pursuant to Ext.P11 judgment, the petitioner remitted an amount of Rs.25,00,000/- and approached the respondent-bank with a fresh proposal. But, the respondent failed to respond. - (xiv) To the utter surprise of the petitioner, he was served with a notice by the respondent stating that he has not complied with the OTS Scheme and is, therefore, liable to pay Rs.5.25/- Crore. - (xv) The petitioner immediately filed WP(C) No.919/2020 before this Court. But, the writ petition was dismissed by Ext.P13 judgment. Challenging Ext.P13 judgment, the petitioner preferred W.A.No.503/2020, which was also WP(C) NO. 10437 OF 2023 **==> picture [7 x 9] intentionally omitted <==** dismissed by Ext.P14 judgment. Then the petitioner preferred SLP No.19036/2021 before the Honourable Supreme Court, which was disposed of by Ext.P15 order. (xvi) Pursuant to Ext.P15 order, the petitioner preferred SA No.355/2021 (Ext.P16) before the Tribunal. The same was opposed by the respondent through Ext.P17 written statement. The Tribunal by the impugned Ext.P19 order has rejected Ext.P16 application. - (xvii)Exts.P10 and P19 are patently erroneous and wrong. Hence, the writ petition. 3. Heard; Sri.Liju V.Stephen, the learned Counsel appearing for the petitioner and Sri.Jawahar Jose, the learned Counsel appearing for the respondent. 4. The challenge in the writ petition is against Ext.P10 order passed by the Appellate Tribunal and Ext.P19 order passed by the Tribunal. WP(C) NO. 10437 OF 2023 7 5. Ext.P10 order was rendered as early as on 13.08.2018. 6. The Constitution of India does not lay down any specific time period within which a writ petition is to be filed, to challenge an order/proceeding of the Courts/ Tribunals/Quasi Judicial Authorities. Nonetheless, it is well settled in a catena of precedents that the challenge has to be made within a reasonable time period. 7. Ext.P10 was passed approximately five years back. There is no plausible explanation in the writ petition explaining the inordinate delay in challenging Ext.P10 order, which by itself is sufficient to reject the challenge. 8. Notwithstanding the laches of delay, a reading of Ext.P10 order shows that the appeal was rejected for the non-deposit of the statutory deposit of Rs.1.5/-Crore that was ordered to be deposited by the Appellate WP(C) NO. 10437 OF 2023 8 Tribunal i.e., 25% of the demand amount as per the mandate under Section 18 of the Act. ## 9. In **Kotak Mahindra bank Private Limited vs.** **Ambuj A. Kasliwal and others** [(2021) 3 SCC 549] a three Judge bench of the Honourable Supreme Court has held that the Appellate Tribunals have the power to impose a condition of pre-deposit to entertain an appeal filed under Section 18 of the Act. 10. Going by reasoning in Ext.P10 order and the law laid down in **Kotak Mahindra Bank Private Limited,** (supra), I do not find any error or illegality warranting the interference with the impugned order by exercising the extra ordinary plenary powers of this Court under Article 226 of the Constitution of India. The petitioner's challenge against Ext.P10 order is meritless and is only liable to be rejected at the threshold. 11. Now, coming to the petitioner's challenge WP(C) NO. 10437 OF 2023 9 against Ext.P19 order. 12. The Hon’ble Supreme Court in **South Indian Bank Ltd vs. Naveen Mathew Philip** (2023 LiveLaw (SC) 320), after adverting to a myriad of earlier judicial pronouncements, has categorically declared that High Courts shall not, unless in extra ordinary circumstances, interfere with proceedings initiated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, in writ proceedings under Article 226 of the Constitution of India. 13. Indisputably, it is without exhausting the statutory remedy and also after suffering Ext.P7 order, that the petitioner is knocking at the doors of this Court on a same cause of action which was earlier rejected and taken up to the Honourable Supreme Court. 14. On an overall appreciation of the pleadings and materials on record, I have no hesitation to hold that WP(C) NO. 10437 OF 2023 10 the present writ petition is a sheer abuse of law and a deliberate action to procrastinate the recovery proceedings. In the above background, I am not inclined to exercise the plenary powers of this Court under Article 226 of the Constitution of India and entertain the petitioner's challenge against Exts.P10 and P19 orders. Nonetheless, it is up to the petitioner to work out his statutory remedies, if any available. Resultantly, I hold that the writ petition is devoid of any merit and is consequentially dismissed. ## **Sd/-** **C.S.DIAS JUDGE** rkc/11.07.23 WP(C) NO. 10437 OF 2023 11 ## **APPENDIX OF WP(C) 10437/2023** PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE BANK GUARANTEE NO. 2/2014 DATED 13-5-2014 DISCHARGED BY THE RESPONDENT BANK Exhibit P2 TRUE COPY OF THE BANK GUARANTEE NO. 31/2012 DATED 28-3-2013 DISCHARGED BY THE RESPONDENT BANK Exhibit P3 TRUE COPY OF THE AWARD DATED 27-11-2015 PASSED BY THE INSURANCE OMBUDSMAN Exhibit P4 TRUE COPY OF THE PETITION FILED BY THE RESPONDENT AS MC NO. 248/2017 BEFORE THE CHIEF JUDICIAL MAGISTRATE COURT, KOLLAM Exhibit P5 TRUE COPY OF THE OBJECTION FILED BY THE PETITIONER AS CMP NO. 4265/2017 IN MC NO. 248/2017 OF THE CHIEF JUDICIAL MAGISTRATE COURT, KOLLAM Exhibit P6 TRUE COPY OF THE ORDER DATED 15-9-2017 IN CMP NO. 4265/2017 IN MC NO. 248/2017 OF THE CHIEF JUDICIAL MAGISTRATE COURT, KOLLAM Exhibit P7 TRUE COPY OF THE ORDER DATED 10-4-2018 PASSED BY THE DRT ERNAKULAM IN S.A 244/2017 Exhibit P8 TRUE COPY OF THE CONDITIONAL STAY ORDER DATED 02-8-2018 PASSED BY THE DRAT CHENNAI IN AIR (SA) 268/2018 Exhibit P9 TRUE COPY OF THE ONE-TIME-SETTLEMENT SCHEME SANCTIONED TO THE PETITIONER BY THE RESPONDENT BANK DATED NIL Exhibit P10 TRUE COPY OF THE ORDER DATED 30-8-2018 OF THE DRAT CHENNAI DISMISSING THE APPEAL FILED BY THE PETITIONER Exhibit P11 TRUE COPY OF THE JUDGMENT DATED 12/06/2019 IN WP(C) NO. 10437 OF 2023 12 W.P(C) NO.15036/2019 OF THIS HON'BLE COURT Exhibit P12 TRUE COPY OF THE SALE NOTICE DATED 23/12/2019 ISSUED BY THE RESPONDENT Exhibit P13 TRUE COPY OF THE JUDGMENT OF THE HIGH COURT DATED 28/01/2020 IN W.P(C) NO.919/2020 Exhibit P14 TRUE COPY OF THE JUDGMENT OF THE HIGH COURT DATED 11/03/2020 IN W.A NO.503/2020 Exhibit P15 TRUE COPY OF THE ORDER DATED 06/12/2021 OF THE HON'BLE SUPREME COURT IN SLP NO.19036/2021 Exhibit P16 TRUE COPY OF THE SECURITISATION APPLICATION (WITHOUT DOCUMENTS) FILED BY THE PETITIONER DATED 14/12/2021 BEFORE THE DRT, ERNAKULAM AS S.A NO.355/2021 Exhibit P17 TRUE COPY OF THE WRITTEN STATEMENT FILED BY THE DEFENDANTS DATED 16/04/2022 IN S.A NO.355/2021 Exhibit P18 TRUE COPY OF THE WRIT PETITION CIVIL NO.179/2022 (WITHOUT DOCUMENTS) FILED BY THE RESPONDENT BEFORE THE HON'BLE HIGH COURT OF KERALA Exhibit P19 TRUE COPY OF THE ORDER DATED 04/01/2023 OF THE DRT ERNAKULAM IN S.A NO. 355/2021 Exhibit P20 TRUE COPY OF THE NOTICE DATED 11-10-2021 ISSUED BY THE RESPONDENT BANK UNDER RULE 8(6) OF THE SECURITY INTEREST (ENFORCEMENT) RULES 2002 Exhibit P21 TRUE COPY OF THE NOTICE DATED 7-12-2021 ISSUED BY THE RESPONDENT BANK UNDER RULE 8(6) OF THE SECURITY INTEREST (ENFORCEMENT) RULES 2002 Exhibit P22 TRUE COPY OF THE 13 (2) NOTICE DATED 24. 08. 2016 ISSUED BY THE RESPONDENT TO THE PETITIONER.