TOC-H (Residential) Public School, Thiruvankulam vs CSB Bank Ltd (formerly Catholic Syrian Bank Ltd)

W.P.© No.1314 of 2022 1 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR** ## **&** **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY** **THURSDAY, THE 15[TH] DAY OF SEPTEMBER 2022 / 24TH BHADRA, 1944** ## **WA NO. 1314 OF 2022** **AGAINST THE JUDGMENTWP(C) 8736/2022 OF HIGH COURT OF KERALA** ## **APPELLANT/S:** - **1 TOC-H (RESIDENTIAL) PUBLIC SCHOOL THIRUVANKULAM, KADUNGAMANGALAM, THRIPUNITHURA, ERNAKULAM. PIN - 682305, REPRESENTED ITS PRESIDENT, DR. K. VARGHESE, AGED 86, S/O LATE KORUTH, RESIDING AT 29/142, CHENGARAMPALLY HOUSE, TOC-H NAGAR, JANATHA ROAD, VYTILLA, ERNAKULAM, , PIN - 682019** - **2 DR. K. VARGHESE AGED 86 YEARS S/O. LATE KORUTH, PRESIDENT, TOC-H (RESIDENTIAL) PUBLIC SCHOOL, RESIDING AT 29/142, CHENGARAMPALLY HOUSE, TOC-H NAGAR, JANATHA ROAD, VYTILLA, ERNAKULAM , PIN - 682019** - **3 ABRAHAM THOMAS AGED 76 YEARS SECRETARY, TOC-H(R) PUBLIC SCHOOL, 7-C, ELEGANT HEIGHTS, INDIRA NAGAR, KADAVANTHRA, ERNAKULAM,, PIN - 682020** - **4 MARY THOMAS AGED 71 YEARS EXECUTIVE DIRECTOR, TOC-H(R) PUBLIC SCHOOL, 7-C, ELEGANT HEIGHTS, INDIRA NAGAR, KADAVANTHRA, ERNAKULAM, PIN - 682020** - **5 PREM VARGHESE AGED 67 YEARS TREASURER, TOC-H(R) PUBLIC SCHOOL, TOC-H NAGAR, TOC-H ROAD, VYTILLA. ERNAKULAM, PIN - 682019 BY ADVS. P.HARIDAS BIJU HARIHARAN SHIJIMOL M.MATHEW P.C.SHIJIN RISHIKESH HARIDAS** W.P.© No.1314 of 2022 2 ## **RESPONDENTS:** |**1**|**CSB BANK LTD. (FORMERLY THE CATHOLIC SYRIAN BANK LIMITED)**| |---|---| ||**REPRESENTED BY AUTHORIZED OFFICER & CHIEF MANAGER, ASSET RECOVERY**| ||**BRANCH, CHITTOOR ROAD, VALANJAMBALAM, ERNAKULAM. , PIN - 682016**| |**2**|**CSB BANK LTD**| ||**TRIPUNITHURA BRANCH, REPRESENTED BY ITS MANAGER, P.B. NO.10,**| ||**KALARIKKAL BAZAR, HILL PALACE ROAD, THRIPUNITHURA, ERNAKULAM, PIN**| ||**- 682301**| ||**BY ADV MADHU RADHAKRISHNAN**| **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 15.09.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.© No.1314 of 2022 3 ## **JUDGMENT** ## **Dated this the 15[th] day of September, 2022** ## **SHAJI P.CHALY,J** This appeal is filed by the writ petitioners challenging the judgment of a learned Single Judge of this Court in W.P.© No.8736/2022 dated 8/4/2022 and the order in Review Petition No.421/2022 in W.P.© No.8736/2022. 2. Brief facts leading to the filing of the writ appeal are as follows: 3. According to the appellants, appellants are conducting a reputed educational institution in Kochi, affiliated to CBSE and conducting classes from LKG to Senior Secondary. Appellants availed 2 term loans and one overdraft facility totaling Rs.3 crores from the respondent bank. According to the appellants, due to the deluge in 2018 and COVID -19 pandemic, the fee collection plummeted and petitioners could not repay the instalments. Thereupon, the petitioners requested the respondent bank to repay the overdue in instalments and reschedule the loan so that the balance can be repaid in EMI during the original tenure, however, the respondents didn't oblige the same. 4. It is submitted by the appellants that when respondents initiated proceedings under section 13(2) of the SARFAESI Act, 2002, appellants W.P.© No.1314 of 2022 4 approached this Court and this court vide judgment dated 8[th] day of April, 2022 in W.P.© No.8736 of 2022, granted instalment facility. During the course of delivering the judgement, learned Single Judge observed that petitioners shall remit total outstanding in 18 instalments. When copy was issued, though in the former part of the judgement petitioners' entitlement for 18 instalments was observed, in the operative portion, due to typographical error, only 12 instalments were granted. Hence, appellants filed Review Petition No. 421/2022 and this Court reviewed the judgement granting 18 instalments, however, due to unfortunate circumstances appellants could not comply with the judgement. 5. It is further submitted by the appellants that the respondents initiated proceedings under section 14 of the SARFAESI Act, 2002 and obtained orders from Chief Judicial Magistrate for dispossessing the appellants and the appellants filed S.A.No.372/2022 challenging the same before the Debt Recovery Tribunal and an interlocutory application is filed seeking stay of the proceedings, however, the stay sought for by the petitioner before the Tribunal in I.A.No.1537/2022 is dismissed, interpreting the judgement of learned Single Judge as if it forecloses all the remedies available to the appellants under statute. According to the appellants, a plain reading of the judgement of the learned Single Judge would appear, that would foreclose all statutory remedies available to the appellants. Hence this Writ Appeal challenging the judgement of the learned single judge. W.P.© No.1314 of 2022 5 6. The subject issue relates to the proceedings initiated by the CSB Ltd. (formerly the Cathoic Syrian Bank Limited), Ernakulam – respondent No.1 herein under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002. The learned Single Judge, after taking into consideration the rival submissions and the adverse situations prevalent in the community, has directed the appellants to pay the outstanding amount of Rs.3,72,17,251/- in 12 equated monthly instalments starting from 16.5.2022 and on the same day of the succeeding months, with a rider that in the event of default of any one of the instalments, the bank will be at liberty to proceed in accordance with law. The coercive proceedings were also directed to be kept in abeyance. 7. Later, a review petition was filed stating that the learned Single Judge has actually disposed of the judgement granting 18 instalments, however, due to a typographical error in the operative portion only 12 instalments was granted; and therefore the order was reviewed to that extent, and the writ petitioners were directed to pay the amount in 18 Equated Monthly Instalments. However, all the other conditions are kept intact except the payment of the first instalment being extended to 5.6.2022. It is thus challenging the legality and correctness of the said judgement and the order, the appeal is preferred. 8. The paramount contention advanced by the appellants is that in spite of W.P.© No.1314 of 2022 6 earnest efforts, the appellants could not raise funds as directed in the impugned judgement and later the bank has secured orders under section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 to take possession of the mortgaged asset and consequential action is being initiated to dispossess the appellants from the mortgaged property. It is further pointed out that aggrieved by the said action, S.A.No.372/2022 is filed before the Debt Recovery Tribunal, Ernakulam, however, the stay sought for by the petitioner before the Tribunal in I.A No.1537/2022 is dismissed, which according to the appellant, had happened due to the orders passes by the writ court in the writ petition and the review petition. Therefore, it is also submitted that liberty of the appellants to move the Tribunal may be left open. 9. We have heard learned counsel for appellants Sri.P.C.Shijin, learned counsel appearing for the respondent Bank Sri.Madhu Radhakrishnan and perused the pleadings and materials on record. 10. The sole question to be considered is whether any interference is required to the judgement and the review order of the learned Single Judge? In our considered opinion, the maintainability of a writ petition against the action taken as per the provisions of the SARFAESI Act, 2002 was under consideration of the Apex Court in various judgments and laid down the law that when there is a W.P.© No.1314 of 2022 7 clear statutory remedy available to an aggrieved person to ventilate the grievances if and when action is initiated under the SARFAESI Act, 2002, a writ petition is not maintainable under law. 11. In a recent judgment in **Phoenix ARC Pvt. Ltd. v. Vishwa Bharati Vidhya Mandir and Others** [(2022) 5 SCC 345], the Apex Court has held that a writ petition is not maintainable taking into account the judgments rendered earlier by the Apex Court in that regard. The relevant portion of the judgment is extracted hereunder: “21 _. Applying the law laid down by this Court in the case of Mathew K. C. (supra) to the facts on hand, we are of the opinion that filing of the writ petitions by the borrowers before the High Court under Art.226 of the Constitution of India is an abuse of process of the Court. The writ petitions have been filed against the proposed action to be taken under S.13(4). As observed hereinabove, even assuming that the communication dated 13/08/2015 was a notice under S.13(4), in that case also, in view of the statutory, efficacious remedy available by way of appeal under S.17 of the SARFAESI Act, the High Court ought not to have entertained the writ petitions. Even the impugned orders passed by the High Court directing to maintain the status quo with respect to the possession of the secured properties on payment of Rs.1 crore only (in all Rs.3 crores) is absolutely unjustifiable. The dues are to the extent of approximately Rs.117 crores. The ad - interim relief has been continued since 2015 and the secured creditor is deprived of proceeding further with the action under the SARFAESI Act. Filing of the writ petition by the borrowers before the High Court is nothing but an abuse of process of Court. It appears that the High Court has initially granted an ex - parte ad - interim order mechanically and without assigning any reasons. The High Court ought to have appreciated that by passing such an interim order, the rights_ W.P.© No.1314 of 2022 8 _of the secured creditor to recover the amount due and payable have been seriously prejudiced. The secured creditor and / or its assignor have a right to recover the amount due and payable to it from the borrowers. The stay granted by the High Court would have serious adverse impact on the financial health of the secured creditor/assignor. Therefore, the High Court should have been extremely careful and circumspect in exercising its discretion while granting stay in such matters. In these circumstances, the proceedings before the High Court deserve to be dismissed._ _14. In view of the above and for the reasons stated above, present appeals succeed. The Writ Petition Nos. 35564 to 35566 of 2015 before the High Court are dismissed. Consequently, the ex - parte ad - interim order dated 26/08/2015 further extended by orders dated 28/02/2017 and 27/03/2018 stand vacated._ _23.Present appeals are accordingly allowed with costs to the appellants to be paid by the original writ petitioners quantified at Rs.1 lakh in both the cases to be directly paid to the appellant within a period of four weeks from today. Pending application(s), if any, also stand disposed of.”_ 12. Even though learned counsel has contended that the liberty of the appellants to approach the Tribunal may be left open, we are unable to agree with the same for the reason that instead of approaching the Tribunal, the appellants have approached this Court and secured orders to pay the outstanding amount in instalments. After securing the benefit in the writ petition, the appellants are not entitled to disregard the directions contained thereunder and seek liberty to approach the Tribunal again challenging the action initiated by the Bank in terms of the provisions of the SARFAESI Act, 2002. This is particularly so W.P.© No.1314 of 2022 9 when the appellants have sought to quash Exhibit P3 proceedings initiated under section 13(2) of the SARFAESI Act, 2002, which in fact is deemed to be declined; after that only, the liberty was granted to the appellant to pay the amount in installments. That being the situation, it may not be correct on the part of this Court to leave open the liberty of the appellants to approach the Tribunal. 13. In that view of the matter and bearing in mind the principles of law laid down by the Apex Court in the issue in question, we do not think the appellants have made out any case for interference with the judgement of the learned Single Judge, especially in the absence of any jurisdictional error or other legal infirmities, insofar as the appellants are concerned. Needless to say, the writ appeal fails, accordingly, it is dismissed. **Sd/-** **S.MANIKUMAR** **CHIEF JUSTICE** smv **Sd/SHAJI P.CHALY JUDGE**