IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 5TH APRIL 2011 / 15TH CHAITHRA 1933 OP (DRT).No. 252 of 2011(O) --------------------------------------- OA.284/2009 of DEBT RECOVERY TRIBUNAL, ERNAKULAM .................... PETITIONER (S): -------------------- ZAKEER HUSSAIN AGED 36 YEARS, S/O.MOHAMMAD, ARUKANDATHIL HOUSE, AYAMKULAM P.O., THAVANOOR, MALAPPURAM DSITRICT. BY ADV. SRI.ALEXANDER GEORGE RESPONDENT(S): ------------------------- 1. STATE BANK OF TRAVANCORE, REPRESENTED BY ITS MANAGER, KUTTIPPURAM BRANCH, MALAPPURAM DISTRICT- 686 505. 2. AUTHORIZED OFFICER/CHIEF MANAGER, STATE BANK OF TRAVANCORE, KUTTIPPURA BRANCH, MALAPPURAM DISTRICT-686 505. *ADDL. R3 IMPLEADED. 3. C.T.GOPAKUMAR, PRASANTH, ALATHOOR P.O., MALAPPURAM DISTRICT. *ADDL. R3 IS IMPLEADED AS PER ORDER DTD. 24.3.2011 IN IA. 5269/2011 IN OP(DRT) NO.252/2011. R1 & R2 BY ADVS. SRI.T.SETHUMADHAVAN, SRI.PUSHPARAJAN KODOTH. ADDL. R3 BY ADV. SRI.P.CHANDRASEKHAR THIS OP (DEBT RECOVERY TRIBUNAL) HAVING COME UP FOR ADMISSION ON 05/04/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: tss C.K.ABDUL REHIM, J --------------------------------------- O.P(DRT) No.252 of 2011 ---------------------------------------- Dated this the 5th day of April, 2011. J U D G M E N T The petitioner along with his wife had availed a 'mortgage loan' to the tune of Rs.4 lakhs, from the respondent Bank. They also stood as guarantors with respect to another loan availed in favour of a firm M/s.S.B.Glass Designers, to which one Sri.Mujeeb Rahman is the Managing Partner. The property belonging to the petitioner and his wife having an extent of 25.5 cents, comprised in Sy.No.98/3 of Thavanoor Village, was mortgaged for securing the above said loans. Consequent to default committed in repayment of the loans, proceedings against the said property was initiated at the behest of the respondents, invoking provisions under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). 2. The petitioner had approached this Court at a stage when the property in question was proclaimed for sale O.P(DRT) No.252 of 2011 2 as per Ext.P5 notice published. It is the contention of the petitioner that O.A.No.284/2009 filed by the respondent Bank was pending disposal before the Debt Recovery Tribunal and the coercive steps initiated in the meanwhile, under the SARFAESI Act, is not sustainable. The petitioner interalia contended that the coercive steps under the SARFAESI Act was being pursued without acceding to his request for settlement of the loans by offering payment of the amounts due, in instalments. 3. Considering the alternative remedy available this Court was not inclined to entertain the writ petition. However, the petitioner was directed to remit a sum of Rs.5 lakhs in order to show his bonafides, by virtue of interim order issued on 7.2.2011. It is reported that the petitioner had complied with the condition. During pendency of the writ petition the property in question was sold pursuant to Ext.P5 proclamation, to additional 3rd respondent, on 7.2.2011, for a sum of Rs.25,75,000/-. It is further stated that the additional 3rd respondent had deposited 25% of the O.P(DRT) No.252 of 2011 3 bid amount on the date of sale itself. However, it is made clear that considering pendency of this writ petition the sale in question was not confirmed by respondents 1 and 2. 4. In the statement filed on behalf of the respondents it is mentioned that the property was taken over possession as early as on 24.9.2010 pursuant to steps initiated under Section 13(4). Inspite of that the petitioner has not remitted any considerable amount and taken any steps to pay off the liability. The sale conducted in favour of the 3rd respondent and the deposit made by the 3rd respondent is admitted by respondents 1 and 2. 5. Learned counsel appearing for the additional 3rd respondent submits that he had deposited an amount of Rs.6,43,750/- as early as on 17.2.2011 and that the amount is remaining blocked due to pendency of this writ petition. 6. Learned counsel for the petitioner submits that the petitioner along with his wife, is the absolute owner of the property in question. They were only guarantors with respect to the loan transaction. It is stated that the total O.P(DRT) No.252 of 2011 4 amount due to the Bank is a sum around Rs.15 lakhs only. Contention of the petitioner is that, it is evident from the sale conducted in favour of the 3rd respondent that, the property now worth more than Rs.25 lakhs. Under such circumstances, the petitioner seeks indulgence of this Court to permit the petitioner to pay off the entire liability due to the Bank with a view to save the property from being sold. The petitioner also expressed willingness to pay reasonable compensation to the 3rd respondent considering the deposit made by him, if directed by this Court. 7. Learned counsel for the 3rd respondent had raised contention that the offer now made by the petitioner for payment of the amounts is not genuine, since he had sold the property to a third party with whom an understanding was arrived to get the sale set aside and to transfer the property after settling the Bank loan. Since the petitioner is not approaching with any genuine request to save the property, this Court could not exercise any equitable jurisdiction in the matter, is the submission. O.P(DRT) No.252 of 2011 5 8. Considering the fact that the petitioner along with his wife are the owners of the property and also considering the fact that the amount due to the Bank is only to the extent of around Rs.15 lakhs, I am of the view that considering equity and good conscious, the petitioner can be permitted to save the property from being sold, by effecting payment of the entire amount due to the Bank and also by paying a reasonable compensation to the 3rd respondent with respect to the deposit made by him. 9. Under the above circumstances the writ petition is disposed of directing the petitioner to make payment of the entire balance outstanding in the loan account on or before 15.5.2011. The petitioner shall make further payment of a sum equivalent to interest calculated on the deposit made by the 3rd respondent (Rs.6,43,750/-) at the rate of 12% per annum, from 17.2.2011 onwards till repayment. If payment as directed above is made before the date stipulated above, the respondents 1 and 2 shall close the loan account and release the mortgage to the O.P(DRT) No.252 of 2011 6 petitioner. The deposit made by the 3rd respondent shall be returned immediately thereon along with the interest which will be deposited by the petitioner as directed above. 10. In case of any default in complying with any of the conditions stipulated above, the respondents 1 and 2 will be free to proceed with further steps initiated pursuant to the sale already made and on such event the petitioner will be precluded from raising any subsequent challenge against such proceedings. C.K.ABDUL REHIM JUDGE ab