Vasanthakumari v. Neyyattinkara Co-Operative Urban Bank Ltd

**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 24TH DAY OF SEPTEMBER 2020 / 2ND ASWINA, 1942 WA.No.1258 OF 2020** **AGAINST THE JUDGMENT IN WP(C) 5235/2020(D) OF HIGH COURT OF KERALA** ## **APPELLANT/PETITIONER IN THE WPC:** **VASANTHAKUMARI AGED 60 YEARS KIZHAKKEPALAPPARAMBU VADAKKEPUTHEN VEEDU, THOTTAVARAM, PERUMKIDAVILA P.O., THIRUVANANTHAPURAM** **BY ADV. SRI.B.KRISHNA MANI** ## **RESPONDENT/RESPONDENT IN THE WPC:** **THE AUTHORIZED OFFICER THE NEYYATTINKARA CO-OPERATIVE URBAN BANK LTD NO.931, HEAD OFFICE, NEYYATTINKARA, THIRUVANANTHAPURAM DISTRICT-695 121.** **SRI.R.T.PRADEEP, SC FOR RESPONDENT** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 24.09.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **W.A.No.1258 of 2020** **2** ## **JUDGMENT** Dated this the 24[th] day of September, 2020 ## **S.Manikumar, C.J.** Being aggrieved by the judgment dated 6.3.2020 of the learned single Judge in W.P.(C)No.5235 of 2020, instant writ appeal is filed. 2. Short facts leading to the filing of the writ petition are that, the petitioner along with her son S.Ratheesh have availed a loan from the Neyyattinkara Co-operative Urban Bank Ltd. by giving a valuable property as security. When the petitioner committed default, the respondent Bank has issued Ext.P1 sale notice informing the petitioner that the sale will take place on 28.2.2020. According to the writ petitioner, a clear 30 days notice as enjoined under the relevant rules has not been given. Moreover, there is no mention about the upset price purported to have been fixed. According to the petitioner, the Bank has the jurisdiction only to sell the required quantum of property and it has no jurisdiction to sell the entire property. Based on the above, the writ petition was filed seeking the following reliefs: “i) Call for records leading to Ext.P1 and quash the same by a writ of certiorari or any other appropriate order or direction; ii) Issue a writ of mandamus or any other appropriate writ, order or direction directing the respondent not to proceed ahead **W.A.No.1258 of 2020** **3** with Ext.P1 in any manner; - iii) Issue a writ of mandamus or any other appropriate writ, order or direction directing the respondent to sell only the required quantum of property after quantification of the amounts if any due ; - iv) Issue a writ of mandamus or any other appropriate writ, order or direction directing the respondent to grant all benefits and concessions as enjoined under law including those under the one time settlement scheme.” ## 3. After hearing the learned counsel for the parties, the writ court disposed of the writ petition by observing thus: “5. Having heard learned counsel for the parties, apprised the paper books and in view of the aforementioned consensus, I dispose of this writ petition with a direction to the petitioner to deposit the aforementioned due along with the interest and the applicable charges within twelve equal monthly instalments commencing from 25.03.2020 upto 25.02.2021. In case of non deposit of two perpetual instalments, the Bank shall be able to take recovery proceedings. Till such time, the recovery proceedings under the SARFAESI Act shall be kept in abeyance.” ## 4. Appellant/writ petitioner has filed the instant appeal inter alia raising the following grounds: The petitioner is unable to comply with the directions in the judgment due to some acute financial difficulties. She is unable to **W.A.No.1258 of 2020** **4** remit the instalments commencing from 25/3/2020 in terms of the judgment of this Hon'ble court. The lockdown due to the pandemic, Covid-19 commenced from 24/3/2020. Above all, the Reserve Bank of India and the Government of India have imposed a moratorium on the recovery of all loans in view of the present pandemic situation due to Covid-19. Thus the respondent is precluded from proceeding ahead in the matter. Under the circumstances, nothing prevents the respondent from rescheduled in the loan account. The petitioner can never be termed as a chronic defaulter. Every endeavour is being paid to repay the loan. 5. Appellant/writ petitioner has further submitted that as mentioned earlier, moratorium on the recovery of all loans have been imposed by the Government of India and the Reserve Bank of India due to Covid-19 situation. Thus there is an absolute embargo on the recovery of loans. The respondent has no jurisdiction to proceed ahead with the recovery of the amounts, if any, alleged to be due. 6. Though Mr.B.Krishna Mani, learned counsel for the appellant made submissions based on the grounds, we are not inclined to interfere with the impugned judgment. 7. Repeatedly, the Hon'ble Supreme Court has held that writ **W.A.No.1258 of 2020** **5** petitions as against proceedings initiated under the SARFAESI Act, 2002 should not be entertained. Reference can be made to a few decisions of the Hon'ble Supreme Court on that aspect. In **Authorised Officer, State Bank of Travancore and Another v. Mathew K.C.** reported in **(2018) 3 SCC 85** , at paragraphs 15 to 18, the Hon'ble Supreme Court held as under: “15. It is the solemn duty of the Court to apply the correct law without waiting for an objection to be raised by a party, especially when the law stands well settled. Any departure, if permissible, has to be for reasons discussed, of the case falling under a defined exception, duly discussed after noticing the relevant law. In financial matters grant of ex-parte interim orders can have a deleterious effect and it is not sufficient to say that the aggrieved has the remedy to move for vacating the interim order. Loans by financial institutions are granted from public money generated at the tax payers expense. Such loan does not become the property of the person taking the loan, but retains its character of public money given in a fiduciary capacity as entrustment by the public. Timely repayment also ensures liquidity to facilitate loan to another in need, by circulation of the money and cannot be permitted to be blocked by frivolous litigation by those who can afford the luxury of the same. The caution required, as expressed in **United Bank of India v. Satyawati Tondon and others** [AIR 2010 SC 3413], has also not been kept in mind before passing the impugned interim order:- “46. It must be remembered that stay of an action initiated by the State and/or its **W.A.No.1258 of 2020** **6** agencies/instrumentalities for recovery of taxes, cess, fees, etc. seriously impedes execution of projects of public importance and disables them from discharging their constitutional and legal obligations towards the citizens. In cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions, which (sic will) ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Of course, if the petitioner is able to show that its case falls within any of the exceptions carved out in **Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad** , [1969 AIR 556, 1969 SCR (1) 518], **Whirlpool Corpn. v. Registrar of Trade Marks** [(1998) 8 SCC 1], and **Harbanslal Sahnia v. Indian Oil Corpn. Ltd.** [AIR 2003 SC 2120] and some other judgments, then the High Court may, after considering all the relevant parameters and public interest, pass an appropriate interim order.” (emphasis supplied) 16. The writ petition ought not to have been entertained and the interim order granted for the mere asking without assigning special reasons, and that too without even granting opportunity to the Appellant to contest the maintainability of the writ petition and failure to notice the subsequent developments in the interregnum. The opinion of the Division Bench that the counter affidavit having subsequently been filed, stay/modification could be sought of the interim order cannot be considered sufficient justification to have declined interference. 17. We cannot help but disapprove the approach of the High Court for reasons already noticed in **Dwarikesh Sugar Industries Ltd. v. Prem Heavy Engineering Works (P) Ltd. and Another** , [(1997) 6 SCC 450], observing :- **W.A.No.1258 of 2020** **7** “32. When a position, in law, is well settled as a result of judicial pronouncement of this Court, it would amount to judicial impropriety to say the least, for the subordinate courts including the High Courts to ignore the settled decisions and then to pass a judicial order which is clearly contrary to the settled legal position. Such judicial adventurism cannot be permitted and we strongly deprecate the tendency of the subordinate courts in not applying the settled principles and in passing whimsical orders which necessarily has the effect of granting wrongful and unwarranted relief to one of the parties. It is time that this tendency stops.” 18. The impugned orders are therefore contrary to the law laid down by this Court under Art.141 of the Constitution and unsustainable. They are therefore set aside and the appeal is allowed.” 8. In Civil Appeal Nos.10243-10250 of 2018 **[ICICI Bank Ltd. v. Umakanta Mohapatra and Others]** , by order dated 5.10.2018, the Honourable Apex Court reaffirmed the legal position that High Court has no jurisdiction to entertain writ petitions under Article 226 of the Constitution of India, relating to matters coming under the purview of SARFAESI Act, 2002, where a statutory remedy is available by filing an application under Section 17 of the said Act. 9. In **K.C.Mathew's** case, Hon'ble Apex Court stated that writ petition challenging proceedings initiated against SARFAESI Act, 2002 is not maintainable, in the light of the alternate remedy provided under the statute. Following the decision in **K.C.Mathew's** case, we are not **8** ## **W.A.No.1258 of 2020** inclined to interfere with the judgment in W.P(C)No.5235 of 2020 dated 6.3.2020. Writ appeal fails and is accordingly dismissed. Pending interlocutory applications, if any, shall stand closed. Sd/- **S.Manikumar, Chief Justice** Sd/- **Shaji P.Chaly Judge** ## **vpv** **/true copy/** **P.A. to Judge**