IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOTTATHIL B.RADHAKRISHNAN TUESDAY, THE 17TH FEBRUARY 2009 / 28TH MAGHA 1930 WP(C).No. 5084 of 2009(E) ------------------------- PETITIONER(S): --------------- MARY VIJAYAKUMAR, 50 YEARS, W/O. VIJAYAKUMAR, CHIRAYIL HOUSE, H. NO. XI/354, KODIKUTHUMALA, ASHOKAPURAM.P.O, ALUVA, ERNAKULAM DISTRICT. BY ADV. SRI.A.F.SEBASTIAN RESPONDENT(S): --------------- 1. THE AUTHORISED OFFICER, HSBC BANK, HARBOUR VIEW RESIDENCY, OPP. TO SHIPYARD, M.G. ROAD, KOCHI - 682 015. 2. THE RESERVE BANK OF INDIA, REPRESENTED BY ITS CONVENOR, CENTRAL OFFICE, MUMBAI - 400 001. 3. UNION OF INDIA, REPRESENTED BY THE SECRETARY TO THE GOVERNMENT, MINISTRY OF BANKING AFFAIRS, NEW DELHI. ADV. SRI.P.PARAMESWARAN NAIR,ASST.SOLICITOR FOR R3 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 17/02/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: THOTTATHIL B RADHAKRISHNAN, J ........................................... WP(C).NO. 5084 OF 2009 ............................................ DATED THIS THE 17TH DAY OF FEBRUARY, 2009 JUDGMENT Petitioner availed a housing loan. She did not repay the amounts in terms of the transaction. This left an amount of Rs.15,59,856.96 as balance on 4.11.2006. The creditor, which does not fall within the definition of “state” under Article 12 of the Constitution of India, issued a notice under Section 13(2) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (hereinafter referred to as SARFAESI Act )on 4.11.2006, even notifying that failure to repay would invite further action under Section 13(4) of that Act. More than two years thereafter, no payments having been made, possession was taken on 13.11.2008 and Ext.P2 possession notice was published. According to the petitioner, even that is only constructive possession. Petitioner states that as if now, bank is proceeding to sell the property and actual dispossession following such sale would throw the petitioner to streets from her dwelling house. She attempts to demonstrate with reference to Ext.P10 that the entire security interest of 30 cents could be sliced into two plots, one of ten cents, and the other of 20 cents with the dwelling house. She states that sale of the plot of ten cents would be sufficient to wipe of the entire outstandings. Her contention is that the WP(C) 5084/2009 2 SARFAESI Act and the Security Interest Enforcement Rules, (hereinafter referred to as the Rules) framed thereunder, do not insist on the secured creditor selling only a parcel or such portion of the security interest as may be necessary to discharge and recoup the outstandings and the absence of such a provision in the securitization rules is ultra vires Article 14 and tends even to impinge Article 21, in so far as petitioner is concerned. It is also stated that the principles contained in Section 13(4)(b) is also apparently followed by a procedure for sale of the entire security interest as a single lot. Viewing the aforesaid, the plea of the petitioner is essentially that there is no compelling provision in the Act and Rules requiring the secured creditor to sell only such portion of the security interest as may be necessary to satisfy the debt. 2. The contract between the parties is not termed as illegal or an unlawful one. The banking sector is not merely one whereby the banking institutions get enriched. The banking establishments are required to keep money in circulation in the society to enable it being available. Public money cannot be kept embedded in unrecovered or unrecoverable debts. This has consistently, with the passage of time, turned out to be a bane of the society. The traditional method for recovery by a civil suit, governed by the provisions of Civil Procedure Code, etc; turned out to be cumbersome in the banking sector. This is WP(C) 5084/2009 3 why different measures have been brought into the legal system with the passage of time, later by enactment of Rural Development Bank Act, working of which led to the legislative wisdom to have SARFAESI Act. The goal is not to annihilate, but to bring back the funds which are being lost out of the mainstream of finance movement in the society. 3. It has to be noticed that Article 14 of Constitution of India is not one that works only in favour of one party. It is a multi faceted constitutional provision which always has to maintain a balance between the different elements that go into a particular situation and also by taking into consideration the rights of the different parties who get involved in a situation. 4. While the application of Article 14 is being insisted upon by the petitioner and she contends that the property could be sliced into two pieces, however that the law does not require the bank to do so, it is also to be remembered that there is no law preventing the petitioner from providing a purchaser of her choice to buy the entire or a portion of the security interest at any time at or before the time fixed by the bank for the sale, so that she could wipe off the outstandings thereby. The petitioner has not pleaded of having taken any action to wipe off the debt even after issuance of Section 13(2) notice way back in early November 2006. There is an infraction of WP(C) 5084/2009 4 Article 14. 5. For the aforesaid reasons, while I do not find any case of arbitrariness or violation of Article 14 or 21, being made out on the facts and in the circumstances of the case, it is ordered that if the petitioner provides a purchaser, either for a portion or for the whole of the security interest, first respondent would necessarily receive the entire amounts due and close the transaction accordingly and drop the proceedings, unless of course the sale has already taken place. I am not impressed to grant any time frame for this since it is for the petitioner to move the fourth respondent for any such relief unless sale has already taken place. Writ petition ordered accordingly. THOTTATHIL B RADHAKRISHNAN, JUDGE lgk/19/2