V. Chandrasekharan Pillai v. Oriental Bank of Commerce and Ors.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** ## **MONDAY, THE 25TH DAY OF AUGUST 2014/3RD BHADRA, 1936** ## **WP(C).No. 34267 of 2009 (C)** **----------------------------------------** ## **PETITIONER :** ## **---------------------** **V.CHANDRASEKHARAN PILLAI, AGED 61, RESIDING AT CHOONADU VEEDU, ILIPPAKULAM MURI, VALLIKUNNAM VILLAGE.** **BY ADVS.SRI.R.RAJASEKHARAN PILLAI SMT.SABINA JAYAN** ## **RESPONDENTS :** - **-------------------------** **1. THE ORIENTAL BANK OF COMMERCE, REPRESENTED BY REGIONAL MANAGER, KORATTIYIL COMPLEX, SASTHRI ROAD, KOTTAYAM.** **2. THE AUTHORISED OFFICER UNDER SECURITISATION AND RECONSTRUCTION FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT 2002, ORIENTAL BANK OF COMMERCE, KOTTAYAM.** **3. PREETHI MATHEW, APPKOTTU MANZIL, APPAKOTTU MURI, THURUTHIKADAVU VILLAGE, THIRUVALLA TALUK NOW AT KORATTIYIL COMPLEX, SASTHRI ROAD, KOTTAYAM.** **R1 BY ADVS. SRI.JACOB E SIMON SRI.AGI JOSEPH R3 BY ADV. SRI.BIJU ABRAHAM** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 25-08-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** Msd. ## **WP(C).No. 34267 of 2009 (C)** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS:** **--------------------------------------** - **EXHIBIT P1 : TRUE COPY OF THE NOTE EXECUTED IN A TEN RUPEE STAMP PAPER** - **EXHIBIT P2 : TRUE COPY OF THE NOTE EXECUTED IN A FIFTY RUPEE STAMP PAPER.** - **EXHIBIT P3 : TRUE COPY OF THE JUDGMENT DATED 28.05.2009 IN O.S.NO.411/08 BEFORE THE MUNSIFF COURT KAYAMKULAM.** - **EXHIBIT P4 : TRUE COPY OF THE NOTICE OF POSSESSION PUBLISHED IN MATHRUBHOOMI DAILY DATED 30.10.2009.** - **EXHIBIT P5 : TRUE COPY OF THE RECEIPT DEPOSITED IN THE NAME OF THE 3RD RESPONDENT BY THE PETITIONER ON 09.11.2007.** **RESPONDENT(S)' EXHIBITS:** **-----------------------------------------** **EXHIBIT R1(A): TRUE COPY OF THE STATEMENT SAVING OF THE BANK ACCOUNT OF THE PETITIONER DATED 09.01.2010 OF THE ORIENTAL BANK OF THE COMMERCE.** **EXHIBIT R1(B): TRUE COPY OF THE STATEMENT OF THE LOAN ACCOUNT DATED 09.01.2010 OF THE ORIENTAL BANK OF COMMERCE.** **EXHIBIT R1(C): NIL** **EXHIBIT R1(D): TRUE COPY OF THE POWER OF ATTORNEY EXECUTED BY THE PETITIONER, DATED 06.10.2006.** **EXHIBIT R1(E): TRUE COPY OF THE TITLE DEED OF THE PROPERTY.** **EXHIBIT R1(F): TRUE COPY OF THE TERM LOAN AGREEMENT EXECUTED BY THE PREETHI MATHEW, DATED 10.10.2006.** **EXHIBIT R1(G): TRUE COPY OF THE STATEMENT OF ACCOUNT OF THE LOAN ACCOUNT IN QUESTION AS ON 30.06.2010.** **//TRUE COPY//** **P.A.TO JUDGE.** Msd. **K. VINOD CHANDRAN, J - - - - - - - - - - - - -- - - - - - - - - - - - - - - - W.P(C) No. 34267 of 2009** **- - - - - - - - - - - - - - - - - - - - - - - - - - - -** ## **Dated this the 25[th] day of August, 2014** ## **J U D G M E N T** The petitioner is aggrieved with the SARFAESI proceedings initiated against the property of the petitioner, which, according to the respondents 1 and 2, is mortgaged to the 1[st] respondent Bank. The petitioner, however alleges no such mortgage was made by the petitioner and that the 3[rd] respondent availed of the loan, without the knowledge of the petitioner and fraudulently deposited the title deed, before the 1[st] respondent. 2. It is to be noticed that even according to the petitioner, the title deeds were handed over to the 3[rd] respondent, for the purpose of availing loan. Exts.P1 and P2 indicate that the 3[rd] respondent had been willingly given the title deed of the petitioner's property and that an encumbrance was created on the same. The petitioner, has in the plaint in a suit filed by him, WPC.34267/2009 : 2 : conceded to have handed over the title deed which again was for the purpose of availing a loan. Claim is against the third respondent, for not having retuned the title deed. 3. A suit filed by the petitioner, against the 3[rd] respondent, was concluded ex-parte, which is revealed at Ext.P3. The plaint averments recorded by the Munsiffs Court also show that the petitioner specifically contended that the title deeds were handed over to the 3[rd] respondent, who was the defendant therein, for availing a loan and that the 3[rd] respondent undertook that the loan would be closed within one year and the title deed returned to the plaintiff. The 3[rd] respondent remained exparte and there was a decree passed directing return of the documents. It is pertinent that the Bank, in whose favour the mortgage was executed, was not a party to the suit. The decree passed in Ext.P3, hence would not bind the Bank. The claim of the petitioner against the 3[rd] WPC.34267/2009 : 3 : respondent would have to be independently agitated and the mortgage in favour of the Bank is not at all affected by the same. 4. The learned counsel appearing for the petitioner, would contend, that the respondent Bank had filed O.A No.378/2012 before the Debt Recovery Tribunal, which is said to be still pending. On the instant writ petition being admitted, this Court has granted an order directing payment of Rs.3,00,000/- to the respondent Bank. On the subsequent revelation of facts, with respect to the mortgage, the petitioner had also approached the Debt Recovery Tribunal with a counter claim, for return of such amounts deposited as per the orders of this Court, which counter claim is pending adjudication by the DRT. 5. The Bank in its affidavit dated 11.01.2010 styles the petitioner as a guarantor; and in the subsequent affidavit dated 15.07.2010 the Bank styled the petitioner as an original borrower, placing Ext.R1(d) WPC.34267/2009 : 4 : Power of Attorney, is the argument addressed to assail the factum of mortgage. However, on going though the two affidavits, this Court cannot countenance such argument. The petitioner, as per the affidavit of the Bank dated 11.01.2010; was styled as the guarantor of the loan availed of by the 3[rd] respondent. Even in the second affidavit, it is stated in paragraph 3 that the 3[rd] respondent herein has taken a term loan against the security of an immovable property. In paragraph 4 it is categorically stated that collateral security of 7.38 ares of property belonging to the petitioner herein, was offered and mortgaged on the strength of a Power-of-Attorney. The mortgage is said to have been created in favour of the Bank by the original borrower itself, on the strength of the power of attorney executed on 06.10.2006. 6. This court does not find any averment in the counter affidavits, that the petitioner is the original borrower, in any loan, in which the property has been WPC.34267/2009 : 5 : mortgaged. The learned counsel for the respondent Bank also submits that there were, in fact, two loans availed of by the 3[rd] respondent, one of which was secured by mortgage of petitioner's property and another by the 3[rd] respondent's property itself. 7. The learned Counsel appearing for the petitioner would further, contend that a criminal case is pending against the Manager of the Bank, as also against the 3[rd] respondent. Another suit has been filed as O.S 426/2011 before the Munsiffs Court Kayamkulam for declaration that the Power-of-Attorney alleged to have been concluded on 06.01.2006 was null and void; wherein the Bank is also made a party. The contention of the petitioner is that the recovery should await the orders in the criminal case as also the orders in the counter claim made by the Tribunal in the O.A filed by the respondent. 8. Admittedly, there are a number of disputed questions and this Court cannot invoke the jurisdiction WPC.34267/2009 : 6 : under Article 226 to go into such disputed questions of fact nor can this Court interdict the recovery initiated by the Bank under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). Despite the contention that the petitioner has raised a counter claim in the O.A filed by the Bank, that would not, at all, affect the recovery initiated under the SARFAESI Act. It is trite that simultaneous proceedings can be initiated by the Bank under the Recovery of the Debts due to the respondent Bank as also the SARFAESI Act. 9. As to the amount of Rs.3,00,000/- deposited by the petitioner, being adjusted towards the loan account, the petitioner could agitate the refund of the same before the Debt Recovery Tribunal in the counter claim filed by the petitioner. However, it is to be noticed that this Court cannot interdict the Bank from proceeding against the property of the petitioner, which was WPC.34267/2009 : 7 : mortgaged to the respondent Bank, on the strength of a power-of-attorney. 10. The allegation raised, with respect to the fraud in creation of the power-of-attorney would have to be agitated by the petitioner before the appropriate forum. The SARFAESI Act also by section 17 provides for a Securitisation Application which could be filed by any aggrieved person against the proceedings taken by the Bank to realise the security interest. The Hon'ble Supreme court has also in **2011(2) SCC 782 Kanaiyalal Lalchand Sachdev v. State of Maharashtra and AIR 2010 SC 3413 United Bank of India v. Satyawati Tandon,** held that, this Court cannot invoke the jurisdiction under Article 226; when there are disputed questions of fact and the matter would have to be considered by the Debt Recovery Tribunal. In such circumstance, leaving open the remedies to the petitioner to agitate the issue before the competent forum, in WPC.34267/2009 : 8 : accordance with law, writ petition is closed. While entertaining delayed application under Section 17 of the SARFAESI Act, the Tribunal shall also keep in mind the provisions of Section 14 of the Limitation Act. Writ petition is dismissed with the above rider. Sd/- **K.VINOD CHANDRAN,** Judge jma //true copy// P.A to Judge