V H Mohamed Basher and Shakeela Basheer v State Bank of India and South Indian Bank Ltd.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE N.NAGARESH** **MONDAY, THE 18[TH] DAY OF DECEMBER 2023/27TH AGRAHAYANA, 1945** **WP(C) NO. 20391 OF 2023** ## **PETITIONER:** **1 V H MOHAMED BASHER, AGED 61 YEARS S/O HAMEED, VALIYAKATH HOUSE, EDATHURUTHY P.O., THRISSUR DISTRICT, PIN - 680703 2 SHAKEELA BASHEER , AGED 54 YEARS W/O V H MOHAMED BASHER, VALIYAKATH HOUSE, EDATHURUTHY P.O., THRISSUR DISTRICT, PIN – 680703** **BY ADV VISHAK JOHNSON K.** ## **RESPONDENT:** **THE CHIEF MANAGER /AUTHORISED OFFICER, M/S STATE BANK OF INDIA, STRESSED ASSETS RECOVERY BRANCH 7TH FLOOR, VANKARATH TOWERS, PALARIVATTOM, ERNAKULAM DISTRICT, KERALA STATE, PIN – 682024** **SRI.JITHESH MENON, STANDING COUNSEL** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 18.12.2023, ALONG WITH WP(C).30155/2023 & 33968/2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C) No.20391/2023 & connected cases : 2 : # **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT** **THE HONOURABLE MR.JUSTICE N.NAGARESH** **MONDAY, THE 18[TH] DAY OF DECEMBER 2023/27TH AGRAHAYANA, 1945** # **WP(C) NO. 30155 OF 2023** **PETITIONERS:** **1 V H MOHAMED BASHER, AGED 60 YEARS S/O HAMEED, VALIYAKATH HOUSE, EDATHURUTHY P.O., THRISSUR DISTRICT, PIN - 680703 2 SHAKEELA BASHEER, AGED 53 YEARS W/O V H MOHAMED BASHER, VALIYAKATH HOUSE, EDATHURUTHY P.O., THRISSUR DISTRICT, PIN – 680703** **BY ADV VISHAK JOHNSON K.** **RESPONDENT:** **THE AUTHORISED OFFICER, SOUTH INDIAN BANK LTD., REGIONAL OFFICE, IRINJALAKUDA, VI/950- B, CHRIST NAGAR, AKP JUNCTION, IRINJALAKUDA NORTH, THRISSUR DISTRICT, PIN – 680125** **BY ADVS. MOHAN JACOB GEORGE, STANDING COUNSEL P.V.PARVATHY (P-41)(K/000036/1991) REENA THOMAS(R-364) NIGI GEORGE(K/1169/2012) ANANTHU V.LAL(K/001233/2022)** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 18.12.2023, ALONG WITH WP(C)NOS. 20391/2023 AND 33968/2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C) No.20391/2023 & connected cases : 3 : # **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT** **THE HONOURABLE MR.JUSTICE N.NAGARESH** # **MONDAY, THE 18[TH] DAY OF DECEMBER 2023/27TH AGRAHAYANA, 1945 WP(C) NO. 33968 OF 2023** **PETITIONER:** **1 V H MOHAMED BASHER AGED 60 YEARS S/O HAMEED, VALIYAKATH HOUSE, EDATHURUTHY P.O., THRISSUR DISTRICT, PIN - 680703 2 SHAKEELA BASHEER AGED 53 YEARS W/O V H MOHAMED BASHER, VALIYAKATH HOUSE, EDATHURUTHY P.O., THRISSUR DISTRICT, PIN – 680703** **BY ADV VISHAKJ OHNSON K.** **RESPONDENT:** **THE AUTHORISED OFFICER SOUTH INDIAN BANK LTD., REGIONAL OFFICE, IRINJALAKUDA, VI/950- B, CHRIST NAGAR, AKP JUNCTION, IRINJALAKUDA NORTH, THRISSUR DISTRICT, PIN – 680125** **BY ADVS. MOHAN JACOB GEORGE, STANDING COUNSEL P.V.PARVATHY (P-41)(K/000036/1991) REENA THOMAS(R-364) NIGI GEORGE(K/1169/2012) ANANTHU V.LAL(K/001233/2022)** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 18.12.2023, ALONG WITH WP(C) NOS.20391/2023 AND 30155/2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C) No.20391/2023 & connected cases : 4 : ## **N. NAGARESH, J.** ````````````````````````````````````````````````````````````` W.P.(C) No.20391, 30155 and 33968 of 2023 ````````````````````````````````````````````````````````````` _Dated this the 18[th] day of December, 2023_ ## **J U D G M E N T** ~ ~ ~ ~ ~ ~ ~ ~ ~ W.P.(C) No.20391/2023 has been filed by the petitioners seeking to direct the respondent to refund the entire sale consideration of ₹1,11,10,000/- in pursuance of the sale dated 04.12.2021 and issuance of sale certificate dated 24.06.2022. The same petitioners filed W.P.(C) No.30155/2023 seeking to command the respondent to clear the outstanding in certain loan accounts in equitable instalments in the interest of justice. The petitioners thereafter filed W.P.(C) No.33968/2023 seeking to command the respondent to allow the petitioner to clear the outstanding in another loan account in equitable instalments. ## W.P.(C) No.20391/2023 & connected cases : 5 : 2. In W.P.(C) No.20391/2023, the petitioners stated that the State Bank of India conducted sale of immovable property of M/s.Pushpa Diams by invoking the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The petitioners participated in the auction and were declared as successful bidders, on 04.12.2021. The purchase price has been ₹1,11,10,000/-. The petitioners paid ₹28,10,000/- on 04.12.2021 and had to remit the balance sale consideration of ₹83 lakhs on 19.12.2021. 3. The petitioners state that in spite of best efforts, the balance sale price could not be remitted as mandated by the sale confirmation letter. The petitioners sought two months more time to arrange the required amount to conclude the sale. Without considering the request, the Bank informed that the e-auction dated 04.12.2021 stands cancelled. The petitioners remitted the balance amount in full and approached this Court filing W.P.(C) No.13868/2022. ## W.P.(C) No.20391/2023 & connected cases : 6 : 4. The writ petition was disposed of as per Ext.P1 judgment directing the respondent to confirm the sale proceedings in favour of the petitioners and to issue and register the Sale Certificate. 5. Accordingly, the Bank confirmed the sale proceedings in favour of the petitioners and issued Ext.P2 Sale Certificate. The original borrower, who was the owner of the property, preferred a writ appeal challenging Ext.P1 judgment. The said writ appeal was allowed as per Ext.P3 judgment. Though the 1[st] petitioner herein challenged Ext.P3 judgment before the Hon’ble Apex Court, the Special Leave Petition filed by the 1[st] petitioner was dismissed as per Ext.P4 judgment. 6. In view of the said developments, the petitioners submitted Ext.P5 representation before the respondent to refund the entire sale consideration remitted by the petitioners. So far, the respondent has not taken any effective steps for refund of the sale consideration. ## W.P.(C) No.20391/2023 & connected cases : 7 : 7. In W.P.(C) No.30155/2023, the petitioners stated that the petitioners availed credit facilities for an amount of ₹1,18,00,000/- in the year 2017 and ECLGS for an amount of ₹21,80,000/- in the year 2020 and a KCC OD for an amount of ₹10 lakhs in the year 2019 from the South Indian Bank Limited. 31.57 Ares of property in Kodungallur Taluk was offered as security. The petitioners could not close the loans. The respondent-Bank issued notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 on 29.04.2023. The respondents are proceeding to take possession of the property of the petitioners. The petitioners state that the amounts alleged to be due to the respondents is not actually due to them. The respondents have capitalised penal interest violating the judgment of the Apex Court in _**Central Bank of India v. Raveendra and others** [(2002) 1 SCC 367]_ . The respondents are compellable to allow the petitioner to clear the outstanding in equitable instalments. ## W.P.(C) No.20391/2023 & connected cases : 8 : 8. In W.P.(C) No.33968/2023, the petitioners stated that they availed credit facility as Term Loan for an amount of ₹17,50,000/-. 6.97 Ares of property in Thrissur Taluk was mortgaged. The petitioner could not repay the loan promptly. The Bank issued Ext.P1 notice under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. 9. The petitioners state that they cannot be treated as chronic defaulters and the amounts alleged to be due to the respondent is not actually due to them. The petitioners are entitled to get the accounts closed by allowing them to make payment in instalments. 10. The Chief Manager of the Bank filed a statement in W.P.(C) No.20931/2023 and resisted the writ petition. The respondent admitted that the petitioner was the successful bidder in the sale conducted on 04.12.2021 for a purchase price of ₹1,11,10,000/- and the petitioner remitted ₹28,10,000/- on 04.12.2021. The Balance purchase price had to be paid in 15 days. The petitioners did not remit the ## W.P.(C) No.20391/2023 & connected cases : 9 : balance sale price and hence the Bank cancelled the auction conducted on 04.12.2021. However, the petitioner approached this Court and this Court by Ext.P1 judgment directed the Bank to confirm the sale by accepting balance sale price. Thereafter, the Bank accepted the balance sale consideration. 11. The respondent pointed out that Ext.P1 was set aside by a Division Bench of this Court as per Ext.P3 judgment and Ext.P3 judgment was confirmed by the Hon’ble Apex Court as per Ext.P4 judgment. The respondent stated that the request submitted by the petitioners in Ext.P5 for refund of sale price will be considered by the Bank and a decision will be taken soon. The Standing Counsel for the respondent pointed out that in view of Rule 9(4) and Rule 9(5) of the Security Interest (Enforcement) Rules, 2002, the amount paid by the petitioner is liable to be forfeited. 12. I have heard the learned counsel for the petitioners and the learned Standing Counsel representing the Bank. ## W.P.(C) No.20391/2023 & connected cases : 10 : 13. The grievance of the petitioners in W.P.(C) No.20391/2023 is that the respondent-Bank is not refunding the amount paid by the petitioners towards purchase price of an auctioned property, when the sale is declared as illegal by this Court. It is not in dispute that the petitioners participated in the auction proceedings held on 04.12.2021 and became the successful bidder for a price of ₹1,11,10,000/-. The petitioners remitted ₹28,10,000/- to the Bank on 04.12.2021 and thereafter paid the balance sale consideration. This Court directed the Bank to confirm the sale proceedings in favour of the petitioners and to issue and register Sale Certificate. The Bank confirmed the sale also. 14. However, in Writ Appeal No.1045/2022, this Court as per Ext.P3 judgment set aside Ext.P2 judgment in W.P. (C) No.13868/2022. Consequently, the sale effected by the Bank to the petitioners has become invalid. Though the petitioners challenged Ext.P3 judgment in W.A. No.1045/2022 by filing Special Leave Petition before the Hon’ble Apex Court, the said petition was dismissed by the W.P.(C) No.20391/2023 & connected cases : 11 : Apex Court as per Ext.P4 judgment dated 21.02.2023. 15. It is to be noted that the petitioners paid the entire sale consideration to the Bank when the sale was not under challenge from any quarters. The petitioners remitted the full sale consideration even before W.P.(C) No.13868/2022 was filed. The sale became invalid consequent to Ext.P3 judgment of this Court in W.A. No.1045/2022 delivered on 02.09.2022. In such circumstances, Rule 9(5) of the Rules, 2002 cannot have application. The judgment of the Hon'ble Apex Court in _**Authorised Officer, State Bank of India v. C. Natarajan and another** (Civil Appeal No.2545 of 2023)_ can also have no application in the facts of the case. The Bank is legally bound to refund the purchase price paid by the petitioners. The Bank cannot retain the amount payable to the petitioners indefinitely. It would amount to unjust enrichment. 16. In the circumstances, W.P.(C) No.20391/2023 is disposed of directing the respondent to refund the purchase price paid by the petitioners, to the petitioners expeditiously ## W.P.(C) No.20391/2023 & connected cases : 12 : and at any rate within a period of two weeks. 17. As far as W.P.(C) Nos.30155/2023 and 33968/2023 are concerned, taking into consideration the facts of the case, the petitioners are directed to pay the entire outstanding amounts due to the respondent in five equal monthly instalments. The first of such instalment shall be paid within a period of one month and the balance outstanding amounts shall be paid in the subsequent four consecutive and equal monthly instalments along with accruing interest and other Bank charges, if any. If the petitioners commit any default in making the payment as directed above, the respondents will be at liberty to proceed against the petitioners in accordance with law. Writ petitions are disposed of as above. Sd/- ## **N. NAGARESH, JUDGE** aks/15.12.2023 ## W.P.(C) No.20391/2023 & connected cases : 13 : ## **APPENDIX OF WP(C) 20391/2023** ## **PETITIONER'S EXHIBITS** |**Exhibit P1**|**TRUE COPY OF THE JUDGMENT **|**DATED**| |---|---|---| ||**15/06/2022 IN WP (C) NO. 13868/2022 OF**|| ||**THIS HON'BLE COURT**|| |**Exhibit P2**|**TRUE COPY OF SALE CERTIFICATE **|**NO.**| ||**1921/1/2022**<br>**REGISTERED**<br>**AT**|**SUB**| ||**REGISTRAR**<br>**OFFICE**<br>**NELLAYI**|**DATED**| ||**19/07/2022**|| |**Exhibit P3**|**TRUE COPY OF THE JUDGMENT **|**DATED**| ||**02/09/2022 IN WA NO. 1045/2022 OF**|**THIS**| ||**HON'BLE COURT**|| |**Exhibit P4**|**TRUE COPY OF THE JUDGMENT **|**DATED**| ||**21/02/2023 IN SPECIAL LEAVE PETITION**|| ||**(CIVIL) DIARY NO. 39363/2022 OF**|| ||**HON'BLE SUPREME COURT**|| |**Exhibit P5**|**TRUE COPY OF REPRESENTATION **|**DATED**| ||**08/03/2023**<br>**SUBMITTED**<br>**BY**|**THE**| ||**PETITIONERS BEFORE THE RESPONDENT**|| W.P.(C) No.20391/2023 & connected cases : 14 : ## **APPENDIX OF WP(C) 30155/2023** ## **PETITIONER'S EXHIBITS** **Exhibit P1 TRUE COPY OF THE NOTICE UNDER SECTION 13(2) OF THE SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002 DATED 29/04/2023 ISSUED BY THE RESPONDENT TO THE PETITIONERS** W.P.(C) No.20391/2023 & connected cases : 15 : ## **APPENDIX OF WP(C) 33968/2023** ## **PETITIONER'S EXHIBITS** ## **Exhibit P1** **TRUE COPY OF THE NOTICE UNDER SECTION 13(4) OF THE SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002 DATED 03/10/2023 ISSUED BY THE RESPONDENT TO THE PETITIONERS**