WA No. 513 of 2022

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR & THE HONOURABLE MR. JUSTICE SHAJI P.CHALY WEDNESDAY, THE 8[TH] DAY OF JUNE 2022 / 18TH JYAISHTA, 1944 ## WA NO. 513 OF 2022 JUDGMENT DATED 30.03.2022 IN WP(C) 359/2022 OF HIGH COURT OF KERALA ## APPELLANTS/PETITIONERS: - 1 ALEXANDER C.F AGED 46 YEARS S/O. FRANCIS CHANAYIL, RESIDING AT CHANAYIL HOUSE, NEAR CHAKKANATT TEMPLE, KARIVELIPPADY, COCHIN-682 005, ERNAKULAM. - 2 MONIMOL K.F., AGED 43 YEARS W/O. ALEXANDER FRANCIS, CHANAYIL HOUSE, NEAR CHAKKANATT TEMPLE, KARIVELIPPADY, COCHIN-682 005, ERNAKULAM. BY ADVS. SAJI VARGHESE KAKKATTUMATTATHIL S.SHYAM AMALENDU A. ## RESPONDENTS/RESPONDENTS: - 1 HDB FINANCIAL SERVICES LIMITED, 3RD & 4TH FLOOR, HEMALATHA MANSION 7-1-397/111 & 112, S.R.NAGAR, HYDERABAD-500 038, TELANGANA, REPRESENTED BY ITS MANAGER. - 2 AUTHORIZED OFFICER (HDB FINANCIAL SERVICES LIMITED), ZENITH HOUSE, OPPOSITE RACE COURSE, MAHALAKSHMI, MUMBAI-400 034. - 3 GENERAL MANAGER, RESERVE BANK OF INDIA, ERNAKULAM NORTH, PB NO.3065, KOCHI-682 018. - R1 & R2 BY ADV P.PAULOCHAN ANTONY THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 08.06.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.A.No. 513/2022 : 2 : Dated this the 8[TH] day of June, 2022. **JUDGMENT** ## S. MANIKUMAR,CJ. Before the writ court, the petitioner has sought for the following reliefs: - 1) Issue a writ of mandamus or any other appropriate order or direction restraining the respondents from pursuing any further legal action in pursuance to Ext. P8 notice. - 2) To quash Exts.P7, P9 notices dated 20.06.2021 and 03.11.2021 respectively and Ext. P5 prepayment statement dated 30.03.2021 as illegal. - 3) To direct the respondents to consider Ext. P10 valuation report and not to sell the property below the valued amount so that the balance sale proceeds after deductions of loan shall be paid back to the petitioners. - 4) To direct the respondents thereafter to take over the secured assets at Ext. P10 value and thus recover the entire loan amount. After adjusting the secured assets valued amount towards the loan debt, the balance amount shall be paid to the petitioner and thus to relieve the petitioner's from the coercive loan recovery procedure. 2. Ext. P7 is the notice issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Ext. P9 dated 03.11.2021 is the W.A.No. 513/2022 : 3 : possession notice. Ext. P5 is the prepayment statement dated 30.03.2021 issued to the appellants/writ petitioners. 3. After considering the pleadings, the rival submissions and taking note of the submission of the learned counsel for the writ petitioners that they are confining themselves to the relief of providing an opportunity to repay the overdue amount in 10 instalments and to get the loan account regularised, writ court vide judgment dated 30.03.2022 in W.P.(C) No. 359 of 2022, ordered thus: 5. Having regard to the circumstances of the case and the situation now prevailing, apart from the submissions made as recorded above, I am of the view that the petitioners can be granted an opportunity to repay the overdue amount in 10 instalments and thereafter, if the amount so directed is repaid within the time as directed above, to have the loan account regularised. 6. Accordingly, there will be a direction to the respondent bank to accept repayment of the entire overdue amount of Rs.26,22,000/- along with bank charges from the petitioners and regularise the loan account of the petitioners on the following conditions: - (i) The overdue amount of Rs.26,22,000/- shall be repaid in ‘10’ equated monthly instalments. (ii) The first instalment shall be paid on or before 30.04.2022 and the remaining instalments shall be paid W.A.No. 513/2022 : 4 : on or before the 30th day of the succeeding months. (iii) Petitioners shall continue to pay the regular EMI’s along with the instalments directed above. (iv) In the event of default of any one instalment, the respondent bank shall be entitled to proceed in accordance with law. (v) In order to enable the petitioners to repay the entire amounts, all coercive proceedings shall be kept in abeyance. The writ petition is disposed of as above. Being aggrieved, instant appeal is filed. 4. Today, when the matter is taken up for consideration, Sri. Alexander C.F., one of the appellants, appeared in person and submitted that the learned counsel has relinquished his vakalath. In support of the same, he also handed over a copy of letter dated 28.05.2022 issued by the counsel Mr. Saji Varghese Kakkattumattathil, relinquishing his vakalath. 5. As per the procedure, the appellants have to file an application along with the letter dated 28.05.2022, to be placed before court for orders. Instead, the first appellant has handed over a copy of the letter dated 28.05.2022 relinquishing vakalath. The same shall form part of the record. 6. Even though the first appellant advanced arguments on the basis of the averments and grounds, we are not inclined to entertain W.A.No. 513/2022 : 5 : the instant appeal, having regard to the decision of Hon'ble Supreme Court in **Authorised Officer, State Bank of Travancore and Another v. Mathew K.C.** [ **(2018) 3 SCC 85],** in which it is held that writ petitions assailing the correctness of proceedings initiated under the SARFAESI Act, 2002 are not maintainable, 7. 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 agencies/ instrumentalities for recovery of taxes, cess, fees, etc. W.A.No. 513/2022 : 6 : 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 :- “32. When a position, in law, is well settled as a result of judicial pronouncement of this Court, it would amount to W.A.No. 513/2022 : 7 : 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 has 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, wherein a statutory remedy is available by filing an application under Section 17 of the said Act. 9. Loan transaction is purely contractual and that this Court, under Article 226 of the Constitution of India, should not interfere in contractual matters, in rescheduling loan payment. Despite the pronouncement of the Hon'ble Supreme Court on the maintainability of W.A.No. 513/2022 : 8 : writ petitions relating to SARFAESI proceedings, the writ court had extended indulgence in granting time for payment of the amounts due and payable to the Bank. If any coercive action is taken by the Bank as per the provisions of SARFAESI Act, 2002, it is always open to the appellants to challenge the same in accordance with law. Appeal fails and accordingly, it is dismissed. sd/- **S. MANIKUMAR, CHIEF JUSTICE.** sd/- **SHAJI P. CHALY, JUDGE.** _Rv_