Writ Appeal No. 1242 of 2023 (K. Bhaskaran and Padmavathi L v State Bank of India and others)

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE THE ACTING CHIEF JUSTICE MR. ALEXANDER THOMAS** **&** **THE HONOURABLE MR.JUSTICE C. JAYACHANDRAN** **WEDNESDAY, THE 19[TH] DAY OF JULY 2023 / 28TH ASHADHA, 1945** **WA NO. 1242 OF 2023 AGAINST THE JUDGMENT IN WP(C) 28611/2022 OF HIGH COURT OF KERALA DTD.7.6.2023** ## **APPELLANTS/PETITIONERS:** 1 K BHASKARAN AGED 70 YEARS S/O KUCHUMMINI RESIDING AT SNEHALAYAM, PUTHIYAVILA P.O, KANDALLOOR, ALAPPUZHA DISTRICT, PIN – 690531. 2 PADMAVATHI L AGED 62 YEARS W/O K. BHASKARAN, RESIDING AT SNEHALAYAM, PUTHIYAVILA P.O,KANDALLOOR, ALAPPUZHA DISTRICT, PIN - 690531 BY ADVS.C.S.MANU DILU JOSEPH T.B.SIVAPRASAD C.A.ANUPAMAN C.Y.VIJAY KUMAR ANANDHU SATHEESH MANJU E.R. ALINT JOSEPH 1 STATE BANK OF INDIA, SME MAVELIKKARA BRANCH, BM COMMERCIAL COMPLEX, NEAR KSRTC BUS STAND, MAVELIKKARA, ALAPPUZHA DISTRICT, REPRESENTED BY ITS BRANCH MANAGER, PIN – 690101. 2 THE AUTHORISED OFFICER (UNDER THE SARFAESI ACT, 2002) STATE BANK OF INDIA, STRESSED ASSETS RECOVERY BRANCH, 7TH FLOOR, VANKARATH TOWERS, PALARIVATTOM, ERNAKULAM, PIN – 682024. 3 K SUKUMARAN, AGED 78 YEARS, S/O.KOCHUMMINI, LEKSHMIPRIYA, PUTHIYAVILA (P.O.), KANDALLOOR VILLAGE KAYAMKULAM, ALAPPUZHA, PIN – 690531. (IMPLEADED AS PER ORDER DTD.19.5.2023 IN I.A.1/2023 IN W.P.(C)28611/2022) ## **RESPONDENTS/RESPONDENTS:** ## **OTHER PRESENT:** SRI. T.K.VIPINDAS-SR. GP THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 19.07.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **ALEXANDER THOMAS, Acg. C.J. & C. JAYACHANDRAN, J. --------------------------------------------------------------------------------W.A.No.1242 of 2023** **---------------------------------------------------------------------------------Dated this the 19[th] day of July, 2023** ## **JUDGMENT** ## **C. Jayachandran, J.** The appellants, who are the petitioners in W.P.(C)No.28611/2022, are aggrieved by the judgment of the learned Single Judge dated 7.6.2023 rendered in the said writ petition, refusing to interfere with the proceedings initiated against the properties of the petitioners under the SARFAESI Act. ## **2.** The facts:- The appellants stood as guarantors for a cash credit facility of Rupees hundred lakhs availed by M/s.Lakshmi Copra Trading Company Ltd. from the 1[st] respondent/State Bank of India, Mavelikkara Branch in the year 1998. Four items of properties belonging to the 2[nd] appellant and two items of properties belonging to the 3[rd] respondent/principal borrower were mortgaged towards security for the loan availed. On 12.8.2022, the 2[nd] respondent/authorised officer, under the SARFAESI Act, 2002 issued notice for sale of all the six properties mortgaged for realisation of a W.A.No.1242 of 2023 -: 2 :- sum of Rs.4,67,88,447/-, whereupon the appellants preferred the instant writ petition. A stay of further proceedings was granted, subject to the condition that the appellants pay 25% of the amount claimed. According to the appellants, they have complied with the conditions. The learned Single Judge further directed respondents 1 and 2 to consider the appellants' request for release of certain title documents, upon payment of 25% of the amount claimed in the notice. The respondents, however, rejected the said request. Thereafter, the order of stay was limited only in respect of the guarantors, wherefore, the bank was only at liberty to proceed against the principal borrower and his properties for realisation of the debt, which however the bank did not choose. The 3[rd] respondent, who got impleaded in the writ petition, also claimed an order of stay in his favour. He, later, filed a separate writ petition as W.P.(C)No.17619/2023 challenging the coercive proceedings of the bank. Both the writ petitions were considered together and the learned Single Judge, vide the impugned judgment, dismissed the writ petitions, relying upon a recent judgment of the Hon'ble W.A.No.1242 of 2023 -: 3 :- Supreme Court in **South Indian Bank Ltd. v. Naveen Mathew Philip** [2023 SCC OnLine SC 435]. **3.** Heard Sri.C.S.Manu, learned counsel for the appellants and Sri.Jithesh Menon, learned Standing Counsel for the respondents 1 and 2 and Sri.C.Unnikrishnan, learned counsel for the 3[rd] respondent. Perused the records. **4.** Learned counsel for the appellants submitted that they have paid a sum of Rs.1.80 crores in obedience to the interim direction of this Court in the writ petition and that they have paid more than Rs.3.5 crores towards the loan account. In such circumstance, the limited prayer of the learned counsel for the appellants is to afford more time and installments in the matter of repayment of loan. Learned counsel, in the alternative, also submitted that he has got a purchaser, who is interested to purchase the property of the principal borrower, for a sum of Rs.3.5 crores, when the outstanding amount in the loan account is only Rs.3.90 crores. W.A.No.1242 of 2023 -: 4 :- **5.** Learned counsel for the respondents 1 and 2 would submit that, in view of the authoritative pronouncement of the Hon'ble Supreme Court in **Naveen Mathew Philip** (supra), this Court cannot interfere with the proceedings under the SARFAESI Act, except in exceptional circumstances, which dictum has been rightly taken stock of by the learned Single Judge in dismissing the instant writ petition. According to the learned counsel, the judgment impugned warrants no interference by this Court. Learned counsel also pointed out that there is a residential house situated in the property of the principal borrower and a claim in respect of the same is pending, wherefore, the said property is not included for sale, for the time being. It was also urged that the appellants have no right in law to insist that their properties are liable to be proceeded against only after proceeding against the properties of the principal borrower, as the same is a matter of choice and convenience of the mortgagee bank. **6.** Learned counsel for the 3[rd] respondent submitted that the appellants are, in fact, the principal borrowers and that the 3[rd] W.A.No.1242 of 2023 -: 5 :- respondent, who is the brother of the 2[nd] appellant, is only a name lender. This is clear from the fact that, as many as four properties of the appellants have been mortgaged as security for the credit facility availed, whereas only two properties of the 3[rd] respondent has been taken as security. It was also submitted that a suit is pending by and between the 3[rd] respondent and the appellants for settlement of accounts. **7.** Having heard the learned counsel appearing on both sides, this Court is not inclined to interfere with the judgment impugned of the learned Single Judge. The following observations in **Naveen Mathew Philip** (supra) are relevant and are extracted here below:- _“13. …............... We may, however, reiterate the settled position of law on the interference of the High Court invoking Article 226 of the Constitution of India in commercial matters, where an effective and efficacious alternative forum has been constituted through a statute. We are also constrained to take judicial notice of the fact that certain High Courts continue to interfere in such matters, leading to a regular supply of cases before this Court. ........................................................................... 14. xxx xxx_ W.A.No.1242 of 2023 -: 6 :- ## _15. xxx xxx_ _16. Approaching the High Court for the consideration of an offer by the borrower is also frowned upon by this Court. A writ of mandamus is a prerogative writ. In the absence of any legal right, the Court cannot exercise the said power. More circumspection is required in a financial transaction, particularly when one of the parties would not come within the purview of Article 12 of the Constitution of India. When a statute prescribes a particular mode, an attempt to circumvent shall not be encouraged by a writ court. A litigant cannot avoid the non-compliance of approaching the Tribunal which requires the prescription of fees and use the constitutional remedy as an alternative.”_ **8.** In paragraph no.17 the Hon'ble Supreme Court referred to a catena of decisions where the position of law regarding the scope of interference of High Courts in matters pertaining to the SARFAESI Act is reiterated. In **State Bank of Travancore v. Mathew.K.C.** [(2018) 3 SCC 85], relied upon by the Hon'ble Supreme Court in **Naveen Mathew Philip** (supra), the Hon'ble Supreme Court has gone to the extent of opining that filing of writ petitions by the borrowers before the High Court under Article 226 of the Constitution of India is an abuse of the process of court. Ultimately, W.A.No.1242 of 2023 -: 7 :- the Hon'ble Supreme Court concluded in paragraph no.18 that except in extra-ordinary circumstances, the High Court shall not exercise its powers under Article 226 of the Constitution in commercial matters involving a lender and a borrower, when the legislature has provided for a specific mechanism for appropriate redressal. **9.** A perusal of the law declared and reiterated in **Naveen Mathew Philip** (supra) would leave no doubt as regards the propriety and legality of the course adopted by the learned Single Judge in the judgment impugned. **10.** We are also not impressed by the offer made before us by the appellants that they have identified a purchaser to buy the property mortgaged by the 3[rd] respondent/principal borrower. Within the limited scope of the proceedings before us, we are not in a position to satisfy ourselves regarding the bonafides of such an offer, especially in the light of the rival claims between the 3[rd] respondent and the appellants. W.A.No.1242 of 2023 -: 8 :- We find no illegality or infirmity in the judgment impugned, with the result, this writ appeal fails and the same is therefore dismissed in limine. Sd/- **ALEXANDER THOMAS, ACTING CHIEF JUSTICE** Sd/- **C. JAYACHANDRAN, JUDGE** skj