IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH MONDAY, THE 24TH NOVEMBER 2008 / 3RD AGRAHAYANA 1930 WP(C).No. 32696 of 2008(P) ----------------------------------------------- AGAINST THE ORDER DATED 25.;9.2008 IN IA 1415/2008. IN SA.154/2008 of DEBT RECOVERY TRIBUNAL, ERNAKULAM .................... PETITIONER(S): ---------------------- SOMARAJAN, "ULLAS BHAVAN", PEZHUKONAM, CHEERANKAVU, EZHUKONE.P.O, KOLLAM. BY ADV. SRI.N.N.SUGUNAPALAN (SR.) SRI.S.SUJIN SRI.C.RAJENDRAN RESPONDENT(S): ------------------------ 1. INDIAN BANK, HEAD OFFICE, NO.31,RAJAJI SALAI, CHENNAI, REPRESENTED BY GENERAL MANAGER. 2. INDIAN BANK, KOLLAM BRANCH, REPRESENTED BY MANAGER. 3. THE DEBTS RECOVERY APPELLATE TRIBUNAL, 4TH FLOOR, INDIAN BANK CIRCLE OFFICE BUILDING NO.57, ELIRAJ SALAI, EGMORE, CHENNAI. 4. THE DEBTS RECOVERY TRIBUNAL, (KERALA & LAKSHADWEEP), ERNAKULAM. ADV. SRI.S.EASWARAN FOR R1 & R2 R4 BY GOVERNMENT PLEADER SRI. BEJOY CHANDRAN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 24/11/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX IN W.P.(C). NO.32696 OF 2008 P PETITIONER'S EXHIBITS: EXT.P1TRUE COPY OF THE APPEAL MEMORANDUM FILED BY THE PETITIONER BEFORE THE HON'BLE DEBTS RECOVERY APPELLATE TRIBUNAL, CHENNAI. EXT.P2TRUE PHOTOCOPY OF ORDER DATED 25.9.2008 IN I.A. NO.1415 OF 2008 IN S.A.NO.154 OF 2008 OF DEBTS RECOVERY TRIBUNAL, ERNAKULAM. EXT.P3TRUE PHOTOCOPY OF THE NOTIFICATION APPEARED IN NEWSPAPER DAILY DATED 6.10.2008. EXT.P4TRUE COPY OF THE APPLICATION I.A. NO. OF 2008 IN I.A. NO.1964 OF 2008 IN M.A. NO. OF 2008 IN S.A.NO.154 OF 2008 ON THE FILE OF THE DEBT RECOVERY TRIBUNAL, ERNAKULAM. EXT.P5TRUE PHOTOCOPY OF THE RELEVANT PAGE OF THE MATHRUBHOOMI DAILY DATED 15.11.2008. RESPONDENTS' EXHIBITS: EXT.R2(A) TRUE COPY OF SA NO.154/2008 BEFORE DRT, ERNAKULAM FILED BY THE PETITIONER. EXT.R2(B) COPY OF THE WRITTEN STATEMENT FILED BY THE RESPONDENT IN SA 154/2008. EXT.R2(C) TRUE COPY OF THE ORDER DATED 3.8.2007 IN I.A.NO.265/2006 & I.A.NO.330/2006 IN T.A.NO.1 OF 2005 ON THE FILE OF DRT, ERNAKULAM. // True Copy // PS to Judge K. M. JOSEPH, J. -------------------------------------- W.P.C. NO. 32696 OF 2008 P -------------------------------------- Dated this the 24th November, 2008 JUDGMENT Petitioner challenges Ext.P2. Petitioner also seeks a direction to the fourth respondent Debts Recovery Tribunal to dispose of S.A. No.154 of 2008 and a further direction is sought to the fourth respondent (which the learned counsel for petitioner points out is a mistake and it should be understood as a direction to third respondent Appellate Tribunal) to consider and take a decision on I.A. No.1964/08. 2. I heard Shri N.N. Sugunapalan, learned senior counsel appearing on behalf of the petitioner and Shri S. Easwaran, learned counsel appearing for respondents 1 and 2. 3. The case of the petitioner, in brief, is as follows: Ext.P2 is the order passed by the Debts Recovery Tribunal vacating the ad interim ex parte order granted in favour of the petitioner. By the ex parte interim order produced as Ext.P1 (at pages 25 to 28), the Debts Recovery Tribunal granted an order WPC.32696/08 P 2 restraining the respondent Bank from taking further steps under the SARFAESI Act till 10.10.2008, subject to the petitioner depositing Rs.75 Lakhs within ten days from 19.9.2008. It is this order which came to be vacated by Ext.P2. Against the same, the petitioner preferred Appeal before the third respondent Appellate Tribunal. Though the petitioner sought interim orders therein, the third respondent did not pass orders thereon. It is this which has led the petitioner to file the Writ Petition. 4. M/s. Sundereswaran, a partnership firm had taken a loan from the first respondent Bank. Proceedings were initiated against them before the Tribunal. A settlement was, however, arrived at on 3.1.2003. By the said agreement, the Bank was to get Rs.300 lakhs from the parties. On 20.2.2003, the Debts Recovery Tribunal, Chennai passed an order by accepting the terms of the agreement. The Recovery Officer visited the properties on 16.3.2003. Along with the petitioner, there were four prospective purchasers. The Recovery Officer, in short, recorded the proceedings evidencing an agreement to purchase WPC.32696/08 P 3 the property in question by the petitioner for a total sum of Rs.95 Lakhs, of which the petitioner was to deposit Rs.20 Lakhs on or before 31.3.2003. Petitioner was to deposit the balance amount on or before 15.4.2003. It is common case that while the petitioner deposited Rs.20 Lakhs, he did not deposit the amount of Rs.75 Lakhs remaining to be deposited on or before 15.4.2003. According to petitioner, there was an attachment at the instance of the Revenue and on the advice of the Bank, the petitioner did not deposit the balance amount. It is thereafter that the petitioner filed the petition in the year 2008 which culminated in initially passing of the ad interim ex parte order already referred to. It is, of course, the common case that the petitioner has deposited that amount of Rs.75 Lakhs before 19.9.2008. It is after the ad interim ex parte order was passed, the first respondent Bank filed Counter Affidavit and it is thereafter that Ext.P2 impugned order came to be passed by the Debts Recovery Tribunal vacating the ad interim ex parte order. Against the same, as already noted, the petitioner had preferred WPC.32696/08 P 4 the proceedings before the third respondent which stands posted to 23.12.2008. 5. Shri N.N. Sugunapalan, learned senior counsel for the petitioner would contend that this is a fit case where this Court should exercise jurisdiction under Article 226, having regard to the entirety of the facts. He would submit that the petitioner has deposited the remaining amount of Rs.75 Lakhs and what is more, the first respondent Bank has accepted the said amount. He reiterates that it was on account of the circumstances already mentioned that the balance amount was not paid earlier. He also submits that while the matter was pending before the Tribunal, it was not proper on the part of the Bank to proceed with such haste and bring the property to sale under the provisions of the SARFAESI Act. Per contra, Shri S. Easwaran, learned standing counsel for respondents 1 and 2 would contend that this is a case where it could not be said that the petitioner has any legal interest. He points out that under the agreement recorded by the Recovery Officer, petitioner was to pay the balance amount of WPC.32696/08 P 5 Rs.75 Lakhs on or before 15.4.2003 and it is long after the said date that the petitioner has filed the present petition which culminated in Ext.P2 and the relief sought for before the Tribunal is beyond the scope of reliefs which can be granted. 6. In the meantime, pursuant to the notice issued under the SARFAESI Act, the property came to be posted for sale on 10.11.2008. This Court passed an interim order on 6.11.2008 which reads as follows: “Adv. Sri. S. Easwaran takes notice on behalf of respondents 1 and 2. Notice to respondents 3 and 4 deferred. There will be an interim order that while the bank may receive offers made by an intending purchaser, the same shall not be opened for a period of three weeks. Awaiting Counter Affidavit. Post on 12.11.08.” It is submitted by Shri S. Easwaran that four tenders were received including that of the petitioner. 7. I feel that the interest of justice would be met if the main proceedings pending before the Debts Recovery Tribunal, Ernakulam as S.A. No.154/08 is disposed of in accordance with WPC.32696/08 P 6 law and in the meantime, while on the one hand the sale under the SARFAESI Act referred to earlier, is permitted to be proceeded with to the extent of it being confirmed in accordance with law, subject to the rider that it will be subject to the decision to be taken on S.A. No.154/08 as aforesaid and further subject to the rider that the possession of the properties in question will not be delivered to the person in whose name the sale will be confirmed by the Bank till the disposal of the matter by the Debts Recovery Tribunal, Ernakulam. 8. Accordingly, the Writ Petition is disposed of directing the Debts Recovery Tribunal, Ernakulam to take up S.A. No.154/08, hear the parties and take a decision in the matter in accordance with law, within a period of ten weeks from the date of production of a copy of this Judgment before it. In the meantime, it is ordered that the tenders received can be opened not before 1.12.2008. The sale can also be confirmed in accordance with law. However, the confirmation of the sale will be subject to the result of S.A. No.154/08 on the file of the WPC.32696/08 P 7 Debts Recovery Tribunal, Ernakulam. It is further ordered that till a decision is taken by the Debts Recovery Tribunal, Ernakulam as aforesaid, the possession of the property shall not be delivered by or on behalf of respondents 1 and 2, to the successful bidder. Sd/= K. M. JOSEPH, JUDGE kbk.