IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOTTATHIL B.RADHAKRISHNAN THURSDAY, THE 4TH DECEMBER 2008 / 13TH AGRAHAYANA 1930 WP(C).No. 16170 of 2008(Y) ------------------------------------------ PETITIONER(S): ------------------------- SUHARA ABDUL KAREEM, W/O.ABDUL KAREEM, KAVUNGAL HOUSE,KANJIRAMATTOM.P.O, ERNAKULAM, BY ADV. SRI.K.G.ANIL BABU RESPONDENT(S): --------------------------- 1. THE SYNDICATE BANK, M.G.ROAD BRANCH (HFG), NEAR KAVITHA THEATRE, ERNAKULAM, REPRESENTED BY ITS BRANCH MANAGER. 2. SRI.JOSEPH JACOB, S/O.JACOB KURIAN, PEEDIKAKKAL HOUSE, EDAPPALLY PO, ERNAKULAM. ADV. SRI.M.P.ASHOK KUMAR FOR R1 SRI.ROY CHACKO FOR R2 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 04/12/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss WPC.NO.16170/2008 Y APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF THE SALE DEED NO.1807/04 DTD. 22/06/04 EXECUTED BY THE PETITIONER IN FAVOUR OF THE 2ND RESPONDENT. EXT.P2: COPY OF THE AGREEMENT EXECUTED BETWEEN THE PETITIONER AND 2ND RESPONDENT DTD. 23/06/04. EXT.P3: COPY OF THE TAX RECEIPT FOR PAYMENT OF BUILDING TAX TO THE AMBALLOOR GRAMA PANCHAYAT DTD. 29/03/08. EXT.P4: COPY OF THE RECEIPTS FOR THE RE-PAYMENT OF THE LOAN. EXT.P5: COPY OF THE NOTICE ISSUED BY THE KERALA WATER AUTHORITY DTD. 4/2/2008. EXT.P6: COPY OF THE ELECTRICITY BILL DTD. 19/05/2008. RESPONDENT'S EXHIBITS: EXT.R1(A): COPY OF THE NOTICE DTD. 02/11/2005. EXT.R1(B): COPY OF THE NEW INDIAN EXPRESS DAILY DTD. 22/04/06. EXT.R1(C): COPY OF THE MALAYALA MANORAMA DAILY DTD. 22/04/06. EXT.R1(D): COPY OF THE NOTICE DTD. 26/12/2006. EXT.R1(E): COPY OF THE NOTICE DTD. 22/03/2008 ISSUED BY THE DISTRICT COLLECTOR. EXT.R2: COPY OF THE RECEIPT DTD. 15/04/2008 ISSUED BY THE AMBALLOOR GRAMA PANCHAYAT. EXT.R2(A): COPY OF THE RECEIPT DTD. 29/02/2008 ISSUED BY THE AMBALLOOR GRAMA PANCHAYAT. EXT.R2(B): COPY OF THE POSSESSION CERTIFICATE DTD. 29/02/2008. EXT.R2(C): COPY OF THE ENCUMBRANCE CERTIFICATE DTD. 29/02/2008. /TRUE COPY/ P.A.TO JUDGE Kss THOTTATHIL B.RADHAKRISHNAN, J. ------------------------------------------- W.P(C).No.16170 OF 2008 ------------------------------------------- Dated this the 4th day of December, 2008 JUDGMENT The first respondent bank granted a loan to the second respondent. He created a security interest in favour of the first respondent to support that loan. By now, the loan became sticky and was classified as NPA, followed by proceedings under the SARFAESI Act, resulting in action to dispossess and sell. 2. The petitioner contends that she is the true owner of that security property and that in terms of Ext.P1, she had transferred it to the second respondent to enable him to avail the loan in his name and by Ext.P2, there was an agreement for re-conveyance and for utilising the loan amount. 3. While the petitioner states that she is entitled to preserve the property by paying off whatever amounts are due, the second respondent states that amounts in terms of Ext.P2 has been paid by him and nothing remains. WPC.16170/08 Page numbers 4. Ext.P1 is a sale deed. Whatever be the quality of the terms of Ext.P1 and any rights and interests accruing as between the parties thereto, it is not for this Court either to enter on an adjudication on those matters or, in any manner, interfere with the rights of the creditor bank to recover in terms of the provisions of law. As far as the bank is concerned, a security interest is created by the person with title in terms of Ext.P1. Therefore, if the security interest has to be put to sale to ensure complete realisation of the outstandings, it has to be done. There cannot be any embargo to that. 5. The petitioner, however, wants this Court to issue a direction, whereby, the bank could receive the amounts from her and even release the documents to the second respondent without prejudice to the contentions of the petitioner in any litigation that she may initiate on the strength of Ext.P2 or otherwise in relation to the disputes between the petitioner and the second respondent. But, in the same breath, she also wants the writ court to defer enforcement in such a way that she would WPC.16170/08 Page numbers get time to pay off the outstandings. This is clearly impermissible. 6. The loan is shown to be a housing loan. If that were so, it would be better for the petitioner and the second respondent not to invite this Court to commend upon the transaction evidenced by Ext.P2. Sham transactions, though may not fall within the trappings of the Banking Transaction Prohibition Act going by the Full Bench decision of this Court, neither the petitioner nor the second respondent can, in any manner, seek deference of enforcement of the rights of the bank. In the aforesaid circumstances, while repelling all contentions as against the right of the bank to proceed further and preserving the contentions inter-se the petitioner and the second respondent, this writ petition is ordered directing that if the amounts due to the first respondent bank is paid off, the bank will close the transaction and release the document to the person who has created the security interest. It will, however, WPC.16170/08 Page numbers mark on the receipt being issued for the remittance, the identity of the person making the deposit, though the credit would be given as against the loan availed by the second respondent. Even if the petitioner pays the amount, this procedure will be adopted. Sd/- THOTTATHIL B.RADHAKRISHNAN, Judge. kkb.