High Court of KeralaSingle Judge2023-07-24Writ petitions disposed of with directions

WP(C) Nos.36257 of 2022 & 16868 of 2023 (Canara Bank, Arm Branch, Ernakulam vs Toddy Workers Welfare Fund Board and others)

Case / Petition Number:WP(C) Nos.36257 of 2022 & 16868 of 2023

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: The Hon. Justice Viju Abraham
Judgment Date: 2023-07-24
Court Decision / Holding: disposed of with directions. The petitions were disposed of, with the court directing settlement of dues with the Toddy Workers’ Welfare Fund Board, deposit of the balance auction amount with the bank within 15 days of judgment, and confirmation of sale subject to completion of settlement within one month. The court left open the broader question of SARFAESI primacy versus other statutory charges, to be resolved in the context of the settlement.
Final Disposition: Writ petitions disposed of with directions

Parties to the Case

Appellants / Petitioners

Canara Bank, Arm Branch, Ernakulam
Rajith Kumar, S/o Sodaran

Respondents

Tahsildhar Revenue Recovery Taluk Office, Kottarakkara, Kollam - 691506
Sub-Registrar, Sub Registrar Office, Kottarakkara, Kollam - 691506
Kishore A, S/o Arjunan, Anjli Kannamcode, Vettikavala, Kollam - 691538
Rani Kishore, W/o Kishore A, Anjali Kannamkode, Vettikavala, Kollam - 691538
Toddy Workers Welfare Fund Board, Pathanamthitta - 689001 (represented by Chief Welfare Fund Inspector)
Canara Bank Ltd., ARM Branch, Ernakulam South - 682016 (Chief Manager/Authorized Officer)
The Authorized Officer, Canara Bank Ltd., ARM Branch, Ernakulam South - 682016
The Chief Manager, Canara Bank, Kottarakkara - 691506
Shaji S., S/o Somanathan, Kollam - 691512
Kishore A, S/o Arjunan, Anjli Kannamcode, Vettikavala, Kollam - 691538

Legal Representation & Advocates

Counsels for Petitioners

• Adv Anirudh Kadavil
• Adv K. Anil
• Adv M.J. Rajasree
• Adv Sajeev Kumar K. Gopal

Counsels for Respondents

• Sri Joby Joseph, Senior Government Pleader
• Adv Anchal C. Vijayan
• Adv G. Santhosh Kumar
• Adv Gopikrishnan Nambiar
• Adv S. Kumar G.

Case Synopsis & Summary

Two writ petitions were heard together in the Kerala High Court. Canara Bank, as secured creditor, challenged certain attachments and sought quashing of orders/encumbrances (Exts. P6–P8) arising from an equitable mortgage over land held as security. Parallelly, in WP(C) No.16868 of 2023, an auction purchaser sought to confirm an e-auction sale for land deposited under a sale process following a loan with Canara Bank. The core dispute surrounding the security interests involved a 2017 attachment by the Toddy Workers’ Welfare Fund Board and the priority between SARFAESI-based secured creditor rights and statutory charges created under state enactments. The court found that the parties had reached an understanding toward settlement of the dues. It directed that the balance auction amount, after 25% already paid, be deposited with the bank within 15 days of judgment, and that settlements with the Toddy Workers’ Welfare Fund Board be finalized to permit sale confirmation. The court left open the question of whether SARFAESI rights override other statutory charges, noting that such issues could be resolved in the context of the settlement. Ultimately, the petitions were disposed of with directions to complete the settlements and proceed with the sale/paperwork within a month thereafter.

Provisions of Law Cited

SARFAESI Act (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act)

Submissions & Arguments

Contentions of Appellants / Petitioners

Canara Bank contended that under the SARFAESI Act, a secured creditor's rights have predominance over statutory charges created under other State enactments, and sought to quash Exts. P6–P8 that reflect government charges encumbering the security land. The bank also pressed that the attachment should not impede the sale process. The auction purchaser argued for settlement of dues and timely deposit of balance sale amount, with a view to confirming the sale; he proposed settlement with the Toddy Workers Welfare Fund Board and sought that the bank complete its formalities for sale after settlement.

Contentions of Respondents

The Toddy Workers Welfare Fund Board asserted the validity of its statutory attachment, insisting on orderly settlement of dues; counsel for the bank emphasized priority under SARFAESI, while the auction purchaser sought sale confirmation subject to settlement. The court’s discussion focused on compatibility of statutory charges with SARFAESI and the practical settlement mechanism to enable sale without interference from the Toddy fund.”

Cited Precedents (3)

Case Name	Citation	Treatment	Explanation
MG Raveendran Nair and Ors v State of Kerala and Ors	Exhibit P11 (High Court of Kerala, 2014)	Mentioned Only	Cited in Appendix as Exhibit P11; no substantive analysis in the judgment text.
WA 612/2015	Exhibit P9 (High Court of Kerala, 2015)	Mentioned Only	Referenced as Exhibit P9; no discussion in the judgment.
DBA 1/2020	Exhibit P10 (High Court of Kerala, 2020)	Mentioned Only	Cited as Exhibit P10; no detailed treatment in the judgment.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MR.JUSTICE VIJU ABRAHAM`** ``` MONDAY, THE 24[TH] DAY OF JULY 2023 / 2ND SRAVANA, 1945 ``` ## **`WP(C) NO. 36257 OF 2022`** ## **`PETITIONER:`** ``` CANARA BANK,ARM BRANCH, 2ND FLOOR, CANARA BANK BUILDING , CHITTOOR ROAD, OPPOSITE GOVERNMENT GIRL HIGH SCHOOL, ERNAKULAM-682016 REPRESENTED BY ITS PRINCIPAL OFFICER AND MANAGER. ``` ``` BY ADVS.ANIRUDH KADAVIL K.V.ANIL, M.J.RAJASREE ``` ## **`RESPONDENTS:`** - **`1 TAHSILDHAR REVENUE RECOVERY TALUK OFFICE, KOTTARAKARA, KOLLAM - 691506`** - **`2 SUB-REGISTRAR SUB- REGISTRAR OFFICE KOTTARAKARA KOLLAM - 691506`** - **`3 SRI.KISHORE A,S/O SRI.ARJUNAN, ANJALI, KANNAMCODE, VETTIKAVALA KOLLAM - 691538`** - **`4 SMT.RANI KISHORE, W/O SRI.KISHORE A ANJALI KANNAMKODE, VETTIKAVALA KOLLAM - 691538`** - **`5 TODDY WORKERS WELFARE FUND BOARD ULLOOR MEDICAL COLLEGE P.O. THIRUVANANTHAPURAM- 695011 REPRESENTED BY CHIEF WELFARE FUND INSPECTOR.`** - **`R1 & R2 BY SR. GP SRI JOBY JOSEPH R3 & R4 BY ADV.ANCHAL C VIJAYAN R5 BY SHRI.G.SANTHOSH KUMAR, SC, KTWWFB`** ``` THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 24.07.2023, ALONG WITH WP(C).16868/2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` WP(C) Nos.36257 of 2022 & 16868 of 2023 2 ## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ``` THE HONOURABLE MR.JUSTICE VIJU ABRAHAM ``` ``` MONDAY, THE 24[TH] DAY OF JULY 2023 / 2ND SRAVANA, 1945 ``` ## **`WP(C) NO. 16868 OF 2023`** ## **`PETITIONER:`** ``` RAJITH KUMAR, S/O.SODARAN,AGED 51 YEARS ``` ``` SREEKRISHNA NILAYAM, THAZHAMEL, ANCHAL, KOLLAM DISTRICT, KERALA - 691306 ``` ## **`BY ADV SAJEEV KUMAR K.GOPAL`** ## **`RESPONDENTS:`** - **`1 THE CANARA BANK LTD., ARM BRANCH,2ND FLOOR, CANARA BANK BUILDING, CHITTUR ROAD, ERNAKULAM SOUTH, REPRESENTED BY ITS CHIEF MANAGER - 682016`** - **`2 THE AUTHORISED OFFICER,CANARA BANK LTD. ARM BRANCH, 2ND FLOOR, CANARA BANK BUILDING, CHITTUR ROAD, ERNAKULAM SOUTH - 682016`** - **`3 THE CHIEF MANAGER, CANARA BANK, VIGHNESWARA ARCADE,MARKET JUNCTION, KOTTARAKKARA, KOLLAM DISTRICT - 691506`** - **`4 THE TODDY WORKERS WELFARE FUND BOARD, REPRESENTED BY THE INSPECTOR, OFFICE OF THE KERALA TODDY WORKERS WELFARE FUND BOARD, PATHANAMTHITTA - 689001`** - **`5 KISHORE A,S/O ARJUNAN, ANJALI, KANNAMCODE,VETTIKKAVALA, VETTIKAVALA P.O., KOTTARAKKARA, KOLLAM DISTRICT - 691538`** - **`6 SHAJI.S,S/O SOMANATHAN, AGED 56 YEARS, THEKKUVILA MELETHIL, ASANMUKKU, KUDAVATTUR, KOLLAM - 691512`** - **`R1 TO R3 BY ADV. GOPIKRISHNAN NAMBIAR, SC. R4 BY ADV SANTHOSH KUMAR G, SC`** WP(C) Nos.36257 of 2022 & 16868 of 2023 3 ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24.07.2023, ALONG WITH WP(C).36257/2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` WP(C) Nos.36257 of 2022 & 16868 of 2023 4 ## **VIJU ABRAHAM, J.** **................................................................. W.P.(C) Nos.36257 of 2022 & 16868 of 2023 .................................................................** Dated this the 24[th] day of July, 2023 ## **JUDGMENT** W.P.(C)No.16868 of 2023 is filed by the auction purchaser seeking to confirm the sale in the e-auction conducted by the 1[st] respondent for which the letter of acceptance of bid was issued to the petitioner. Whereas W.P.(C) No.36257 of 2022 is filed by the bank seeking to quash Exts.P6, P7 and P8 issued by the 2[nd] respondent to the extent that there is an order of attachment dated 30.10.2017 in item Nos.2 and 3 in Exts.P4 and 4.20 Ares of land in re-survey No.78/10 of Kottarakkara Village which is kept as security for the equitable mortgage created. 2. When the matter was taken up for consideration, both sides would submit that an understanding has been arrived at for the settlement of the dispute. The registration of the document in favour of the auction purchaser could not be effected due to the attachment for dues towards the Toddy Workers’ Welfare Fund Board. The contention of the petitioner bank in the light of Ext.P10 judgment is that the WP(C) Nos.36257 of 2022 & 16868 of 2023 5 secured creditor under the SARFAESI Act has predominance over all statutory charges due to the Government created under other State enactments. The petitioner in W.P.(C) No.16868 of 2023 is the auction purchaser who submits that the balance auction amount due to the bank less the 25% already remitted will be deposited with the bank within a period of 15 days from the date of receipt of a copy of the judgment. He further submits that whatever amount due to the 4[th] respondent in W.P.(C)No.16868 of 2023 will also be paid in the meanwhile. If the amount is paid to the 4[th] respondent Toddy Workers’ Welfare Fund Board as undertaken, they shall immediately provide necessary instructions in this regard to the 2[nd] respondent in W.P.(C) No.36257 of 2022, the Sub Registrar, Sub Registrar Office, Kottarakkara, Kollam regarding the settlement of the dues. The petitioner in W.P.(C)No.16868 of 2023 shall also intimate the bank regarding the settlement of dues towards the Toddy Workers’ Welfare Fund Board. Thereafter the sale shall be confirmed and necessary steps regarding the issuance of sales certificate, etc. shall be done within a further period of one month thereafter. The contention of the respondent bank as well as the petitioner in W.P(C) No.16868 of 2023 that the secured creditor under the SARFAESI Act has predominance over the statutory charge due to the Government created under the other enactments is left open. WP(C) Nos.36257 of 2022 & 16868 of 2023 6 With the abovesaid directions the above writ petitions are disposed of. Sd/- **VIJU ABRAHAM JUDGE** cks WP(C) Nos.36257 of 2022 & 16868 of 2023 7 ## **`APPENDIX OF WP(C) 36257/2022`** ``` PETITIONER EXHIBITS ``` ``` Exhibit P1 ``` ``` A TRUE COPY OF THE LETTER EVIDENCING DEPOSIT OF TITLE DEEDS DATED 29.11.2013 DEPOSITING 4.20 ARES OF LAND IN RE-SURVEY NO.78/10 OF KOTTARAKKARA VILLAGE ON 28.11.2013 EXECUTED BY THE 3RD RESPONDENT IN FAVOUR OF CANARA BANK, KOTTARAKKARA BRANCH ``` - `Exhibit P2 A TRUE COPY OF THE LETTER EVIDENCING DEPOSIT OF TITLE DEEDS DATED 29.11.2013 DEPOSITING 23.60 ARES (11.80 + 11.80) OF LAND IN RE-SURVEY NO.237/2/2, 237/2/1 IN KOTTARAKKARA VILLAGE ON 28.11.2013 EXECUTED BY THE 3RD RESPONDENT IN FAVOUR OF CANARA BANK, KOTTARAKKARA BRANCH` - `Exhibit P3 A TRUE COPY OF THE LETTER EVIDENCING DEPOSIT OF TITLE DEEDS DATED 29.11.2013 DEPOSITING 66.10 ARES OF LAND COMPRISING OF 02.02 ARES IN RESURVEY NO.164/4/1/2, 01.88 ARES IN RESURVEY NO.164/3/2, 44.71 ARES IN RESURVEY NO.164/2/2, 08.09 ARES IN RESURVEY NO.164/2/1, 09.40 ARES IN RESURVEY NO.164/1 AND RESIDENTIAL BUILDING IN VENKITANGU VILLAGE ON 28.11.2013 EXECUTED BY THE 3RD RESPONDENT IN FAVOUR OF CANARA BANK, KOTTARAKKARA BRANCH` - `Exhibit P4 A TRUE COPY OF THE SALE NOTICE DATED 09.08.2022 ISSUED BY THE PETITIONER` ``` Exhibit P5 ``` - `A TRUE COPY OF THE JUDGMENT IN OP(DRT) NO.375/2022 DATED 06.10.2022` ``` Exhibit P6 ``` ``` A TRUE COPY OF THE ENCUMBRANCE ``` WP(C) Nos.36257 of 2022 & 16868 of 2023 8 ``` CERTIFICATE NO.5985/2022 DATED ``` - `02.08.2022 IN RESPECT OF 2ND ITEM OF EXHIBIT P4 NOTICE ISSUED BY THE 2ND RESPONDENT` - `Exhibit P7 A TRUE COPY OF THE ENCUMBRANCE CERTIFICATE NO.5979/2022 DATED` - `01.08.2022 IN RESPECT OF 3RD ITEM OF EXHIBIT P4 NOTICE ISSUED BY THE 2ND RESPONDENT` - `Exhibit P8 A TRUE COPY OF THE ENCUMBRANCE CERTIFICATE NO.5978/2022 DATED` - `01.08.2022 IN RESPECT OF 4.20 ARES OF LAND IN RE-SURVEY NO.78/10 OF KOTTARAKKARA VILLAGE` - `Exhibit P9 A TRUE COPY OF THE JUDGMENT DATED IN 24.07.2015 IN WA NO.612/2015 BY THE HONOURABLE HIGH COURT` - `Exhibit P10 A TRUE COPY OF JUDGMENT DATED 19.05.2020 IN DBA 1/2020 BY THE HONOURABLE HIGH COURT` - `Exhibit P11` - `A true copy of the Judgment in M G Raveendran Nair and Ors vs State of Kerala and Ors dated 23.10.2014 by the High Court of Kerala` ``` Exhibit P12 ``` - `A true copy of the Debtor based search report of 3rd Respondent confirming the registration of security interest on 28.11.2013 by CERSAI downloaded on 28.02.2022` ``` RESPONDENT EXHIBITS ``` - `Exhibit R3(a)` ``` True copy of the notice issued by the petitioner to respondents 3 and 4 dated 21.12.2019 ``` - `Exhibit R3(b)` ``` True copy of the communication No. CB ARM SALE 05/2022 AJ dated 16.09.2022 ``` WP(C) Nos.36257 of 2022 & 16868 of 2023 9 ``` produced by the petitioner before the Debts Recovery Tribunal, Ernakulam in I.A. No.2500/2022 in S.A. No.188/2020 ``` ``` Exhibit R3(c) ``` ``` True copy of the order passed by the Debts Recovery Tribunal-II, Ernakulam in I.A. No.2500/2022 and I.A. No.2501/2022 in S.A. No.188/2020 dated 16.11.2022 ``` WP(C) Nos.36257 of 2022 & 16868 of 2023 10 ## **`APPENDIX OF WP(C) 16868/2023`** ``` PETITIONER EXHIBITS ``` ``` Exhibit P1TRUE COPY OF THE SALE NOTICE DATED 17- 12-2022 PUBLISHED BY THE 2ND RESPONDENT ``` ``` Exhibit P2TRUE COPY OF THE LETTER DATED 30-01- 2023 ISSUED BY THE CHIEF MANAGER OF THE BANK REGARDING ACCEPTANCE OF THE BID ``` ``` Exhibit P3TRUE COPY OF THE COMMUNICATION DATED 11-02-2023 FROM THE PETITIONER TO THE AUTHORIZED OFFICER OF THE BANK ```