W.A.No.1251 of 2016 (against the judgment in WPC 2720/2016, High Court of Kerala)

W.A.No.1251 of 2016 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** **MONDAY, THE 29[TH] DAY OF AUGUST 2022 / 7TH BHADRA, 1944** **WA NO. 1251 OF 2016 AGAINST THE JUDGMENT IN WPC 2720/2016 OF HIGH COURT OF KERALA** ## **APPELLANTS/WRIT PETITIONERS:** - **1 SHAJU AGED 35, S/O. SASIDHARAN, SHAJU BHAVAN, NALLANADU VILLAGE, VENJARAMOODU,THIRUVANANTHAPRUAM.** - **2 PRASEETHA AGED 33 YEARS AGED 33, D/O. LATE RADHAMANI, SHAJU BHAVAN, NALLANADU VILLAGE, VENJARAMOODU, THIRUVANANTHAPRUAM.** **BY ADVS. SRI.G.P.SHINOD SHRI.AJIT G ANJARLEKAR SRI.GOVIND PADMANAABHAN SRI.RAM MOHAN.G.** ## **RESPONDENTS/RESPONDENTS:** - **1 KOLLAM DISTRICT CO-OPERATIVE BANK HEAD OFFICE, KOLLAM-691 001, REPRESENTED BY ITS AUTHORISED OFFICER.** - **2 JIJINI D/O. SASIDHARAN VAIDYAN, PRADEEP BHAVAN, KOTTUKKAL VILLAGE, KOTTARAKKARA TALUK, KOLLAM DISTRICT-691 506.** - **3 PRADEEP PRADEEP BHAVAN,KOTTUKKAL VILLAGE, KOTTARAKKARA TALUK,KOLLAM DISTRICT-691 506.** - **4 PRAN KUMAR PRADEEP BHAVAN,KOTTUKKAL VILLAGE, KOTTARAKKARA TALUK,KOLLAM DISTRICT-691 506.** W.A.No.1251 of 2016 2 **BY ADVS.** **SRI.P.C.SASIDHARANN STANDING COUNSEL FOR R1** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 29.08.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.A.No.1251 of 2016 3 ## **J U D G M E N T Dated this the 29[th] day of August, 2022** ## **S.MANIKUMAR, CJ.** Before the writ court, petitioners sought for a writ of certiorari to quash Exhibit P7 sale certificate issued by the Recovery Officer. - 2.Short facts leading to the filing of the writ appeal are as follows: 3. The petitioners in the writ petition are the appellants herein. According to the appellants, the property having a total extent of 3.75 Ares comprised in ReSurvey No. 42/28 in Block No. 44 of Kottukkal Village, Kottarakkara along with the residential house situated therein originally belonged to late Radhamani, mother of the second appellant and respondents 3 and 4. The aforementioned property was purchased by the appellants as per Exhibit P1 Sale Deed on 22.08.2011. Thereafter, the appellants were in absolute possession and enjoyment of the aforesaid property and attempts were made by respondents 3 and 4 to impeach the sale in favour of the appellants, which led to the filing of Exhibits P2 and P5 suits. In the meanwhile, Radhamani passed away on 27.09.2012. Much thereafter, it was noticed that respondents 3 and 4 were renovating the building in the property covered by Exhibit Pl. 4. It is submitted by the appellants that enquiries made revealed that the W.A.No.1251 of 2016 4 said property was sold in auction by the first respondent and purchased by the second respondent, who is the wife of the third respondent. According to the appellants, on obtaining Exhibit P7, a copy of the sale deed in favour of the second respondent by the first respondent, realised that the entire proceedings leading to Exhibit P7 were vitiated on various counts. The entire proceedings leading to Exhibit P7 were initiated against a dead person and were therefore void ab initio. 5. It is further submitted by the appellants that the statutory mandates under the 'Rules' were not complied with while proceeding against the property covered by Exhibit P1. The appellants, who were the rightful owners were not issued with any notice in the proceedings initiated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002, hereinafter called, 'SARFAESI Act', against the property covered by Exhibit P1, thereby violating the principles of natural justice. Apart from the above, purchase of the property in favour of the second respondent that too for a meager amount, categorically revealed the fraud perpetuated by respondents 2 to 4 to the active connivance of the first respondent. Therefore, according to the appellants, the entire proceedings leading to Exhibit P7 is void ab initio. The Learned Single Judge, however, holding that the appellants have to pursue the remedy provided under the 'SARFAESI Act' dismissed the writ petition as not maintainable. Aggrieved by the judgment of the Learned Single Judge, this writ appeal is preferred. 6. Adverting to the rival submissions, writ court vide judgment dated 8[th] March, 2016 in W.P.© No.2720 of 2016, held that the writ petition is not W.A.No.1251 of 2016 5 maintainable and it is always open to the writ petitioner to approach the Debt Recovery Trib unal for setting aside Exhibit P7 sale deed. Being aggrieved instant writ appeal is filed. 7. Record of proceedings shows that the writ appeal is filed on the grounds inter alia that no notice was served before issuing recovery certificate and that there is violation of principles of natural justice. In addition to the above, contention has been made that the borrower viz., Radhamani died on 27.9.2012. It is the further submission of the appellants that when the mandatory notice contemplated under rules 3 & 8 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Rules, 2002, the entire proceedings leading to Exhibit P7 is vitiated for want of statutory compliance. In the above said background, Mr.Shinod.G.P. - learned counsel for appellants made submissions. 8. Record of proceedings shows that on 14[th] March, 2019, a Hon'ble Division Bench of this Court while admitting the writ appeal, passed the following order: ## “ **O R D E R** There is a specific case for the appellant that the property was sold by the 1[st] respondent Bank to the 2[nd] respondent, who is none other than the wife of the 3[rd] respondent without any notice or involvement of the person by name 'Radhamani' who was the owner of the property covered by Ext.P1, and who is the mother of the 2[nd] appellant and also the 3[rd] and 4[th] respondents. It is pointed out that the 2[nd] respondent, who purchased the property cannot plead ignorance as to the demise of the mother-in-law in the year 2012 as W.A.No.1251 of 2016 6 disclosed from Ext.P4 death certificate and hence there is an instance of fraud. 2. The proceedings were finalised and the sale was conducted after the death of the property owner. It has to be ascertained whether the proceedings were finalised by the Bank in accordance with law and also whether the appellant should be relegated to move the DRT, if the version of the appellant with respect to 'fraud' is correct. This is more so since, fraud and justice do not coexist, in view of the ruling rendered by the Hon'ble Supreme Court in United India Insurance Company Ltd. v. Rajendra Singh **[2000 (3) SCC 581** ]. We find it appropriate to admit the matter to ascertain the views from the 1" respondent Bank as well. ## 3. Admit. 4. Adv. Ajaya Kumar G., the learned counsel takes notice on behalf of the 2nd respondent. Issue urgent notice to respondents 1, 3 and 4 by speed post, returnable within ten days."learne 9. On this day, when the matter is taken up for hearing, Mr.Shinod.G.P. - learned counsel for appellants reiterated the above grounds. 10. Per contra, while inviting attention of this Court to the recent decision of the Hon'ble Supreme Court in **Phoenix ARC Private Limited v. Vishwa Bharati Vidya Mandir and Others** [(2022) 5 SCC 345] Mr.P.C.Sasidharan – learned Standing Counsel for respondent No.1 -Kollam District Co-operative Bank, Head Office, Kollam, represented by its Authorised Officer, submitted that when there is alternative remedy provided under section 17 of the SARFAESI Act, 2002, the writ W.A.No.1251 of 2016 7 petition is not maintainable. 11. Heard learned counsel for parties and perused materials available on record. 12. The question as to whether notices were not served in the manner as contemplated under the above said rules can be raised before the Debt Recovery Tribunal by adducing evidence and the violation of principles of natural justice can also be raised before the Tribunal, if any application is filed under section 17 of the SARFAESI Act, 2002 challenging the impugned proceedings. 13. In **Phoenix** (supra), the Hon'ble Supreme Court, after considering various decisions held that a writ against SARFAESI proceedings is not maintainable. Relevant paragraphs are extracted: “ **21.** Applying the law laid down by this Court in Mathew K.C. [State Bank of Travancore v. Mathew K.C., (2018) 3 SCC 85 : (2018) 2 SCC (Civ) 41] to the facts on hand, we are of the opinion that filing of the writ petitions by the borrowers before the High Court under Article 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 Section 13(4). As observed hereinabove, even assuming that the communication dated 13-8-2015 was a notice under Section 13(4), in that case also, in view of the statutory, efficacious remedy available by way of appeal under Section 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 W.A.No.1251 of 2016 8 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 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. **22.** In view of the above and for the reasons stated above, the present appeals succeed. Writ Petitions Nos. 35564-66 of 2015 before the High Court are dismissed. Consequently, the ex parte ad interim order dated 26-8-2015 [Vishwa Bharathi Vidya Mandir v. Authorized Officer, WP No. 35564 of 2015, order dated 26-8-2015 (Kar)] further extended by orders dated 28-2-2017 and 27-3-2018 [Vishwa Bharathi Vidya Mandir v. Authorized Officer, WP No. 35564 of 2015, order dated 27-32018 (Kar)] stand vacated. **23.** The 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. 14. After considering the rival submissions, facts and circumstances of the case and the decision cited supra, we are of the view that the writ petition is not maintainable. Therefore, we find there is no error in the impugned judgment warranting interference. W.A.No.1251 of 2016 9 15. Instant writ appeal, challenging Exhibit P7 sale certificate, is pending before this Court for the last 6 years. Though Mr.Shinod.G.P. - learned counsel for appellants, prays to condone the delay in filing the application under section 17 of the Secularisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 by this Court, we are of the view that section 14 of the Limitation Act, 1963 contemplates satisfaction of the Tribunal or the court, as the case may be, to condone the delay in filing, and therefore, we are not inclined to pass an order condoning the delay. If any application is filed under section 17 of the SARFAESI Act, 2002 along with condonation petition explaining the cause for the delay, it is for the Debt Recovery Tribunal to consider the same on merits and in accordance with law. Instant writ appeal is dismissed accordingly, however, liberty is given to the appellants to approach the Tribunal to vindicate their grievances, in accordance with law. Sd/- ## **S.MANIKUMAR, CHIEF JUSTICE** smv Sd/- **SHAJI P. CHALY, JUDGE**