IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON THURSDAY, THE 20TH AUGUST 2009 / 29TH SRAVANA 1931 WP(C).No. 20235 of 2009(Y) -------------------------- ( OA.189/2001 of DEBT RECOVERY TRIBUNAL, ERNAKULAM) PETITIONERS: --------------- 1. T.K.VISWAN, S/O.RAMOOTTY, THEKKEKOODAMCHALIL, SAIMANTHIKAM, KAKKODI P.O., KOZHIKODE-673 611. 2. C.MALATHY, W/O.T.K.VISWAN, THEKKEKOODAMCHALIL, SAIMANTHIKAM, KAKKODI P.O., KOZHIKODE-673 611. BY ADV. SRI.R.BINDU (SASTHAMANGALAM) RESPONDENTS: --------------- 1. FEDERAL BANK LIMITED, KOZHIKODE BRANCH, CHEROOTTY ROAD, KOZHIKODE-673 032. 2. M.BIJU, S/O.KUNHI KRISHNAN NAIR T., KALLANGIRALIL HOUSE, PADINHATTUMURI P.O., KAKKODI, KOZHIKODE-673 611. 3. DEBT RECOVERY APPELLATE TRIBUNAL, CHENNAI. 4. THE RECOVERY OFFICER, DEBT RECOVERY TRIBUNAL, ERNAKULAM. R2 BY ADV. SRI.K.P.DANDAPANI, SENIOR ADVOCATE BY ADV. SRI.GIGIMON ISSAC R1 BY ADV. SMT.P.V.PARVATHI BY ADV. SMT.REENA THOMAS BY ADV. SRI.L.RAM MOHAN BY ADV. SRI.MOHAN JACOB GEORGE THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 20/08/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 20235 of 2009 APPENDIX PETITIONERS' EXHIBITS: EXT.P1 : TRUE COPY OF THE JUDGMENT IN WRIT PETITION NO. 27599 OF 2007 EXT.P2 : TRUE COPY OF THE ORDER DATED 05.03.2009 EXTENDING TIME. EXT.P3 : TRUE COPY OF THE RECEIPT DATED 19.02.2009 EXT.P4 : TRUE COPY OF THE RECEIPT DATED 19.03.2009 EXT.P5 : TRUE COPY OF THE NOTICE DATED 29.04.2009 FROM THE 3RD RESPONDENT EXT.P6 : TRUE COPY OF THE REPLY SUBMITTED BY THE PETITIONERS. EXT.P7 : TRUE COPY OF THE NOTICE DATED 08.07.2009. EXT.P8 : TRUE COPY OF THE RESTORATION APPLICATION FILED BY THE PETITIONER BEFORE THE DRAT. EXT.P9 : TRUE COPY OF THE APPEAL MEMORANDUM. EXT. P10 : TRUE COPY OF THE CERTIFICATE ISSUED BY THE LIC. RESPONDENTS' EXHIBITS: EXT. R2(a) : COPY OF THE RECOVERY OFFICER IN DRC.NO.1166 IN O.A. 189 OF 2001. EXT.R2(b) : TRUE COPY OF THE JUDGMENT IN W.P.(C) 18232 OF 2009 OF THE HIGH COURT OF KERALA DATED 30.06.2009. /TRUE COPY/ P.S. TO JUDGE. P.R. RAMACHANDRA MENON, J. ........................................................................ W.P.(C) No. 20235 OF 2009 ......................................................................... Dated this the 20th August, 2009 J U D G M E N T The petitioners have approached this Court, mainly having been left in the dark, when coercive proceedings are being pursued against them, pursuant to the sale of the properties ordered and conducted at the instance of the respondent Bank on one side and when the statutory appeal preferred by the petitioners before the DRAT as borne by Ext.P9, happened to be left in cold storage for the reason that the DRAT, Chennai is not functioning independently as on date and that the charge stands handed over to the DRAT, Mumbai, who reportedly, is not conducting any camp sitting at DRAT, Chennai. 2. With regard to the sequence of events, the petitioners had availed a loan from the respondent Bank years back, which however could not be repaid on time. This led to the coercive proceedings taken by the respondent Bank, invoking the W.P.(C) No. 20235 OF 2009 2 provisions under the SARFAESI Act. Later, the property over which the security interest was created, was subjected to sale, but there were no bidders on 18.9.2006 ( on which date the sale was scheduled), under which circumstance, it was adjourned to 11.6.2006. It is stated that, since there was no bidder on that day as well, it was reportedly adjourned to the next day, on which date, the quote given by the second respondent was accepted and the sale was conducted for a sum of Rs. 7.3 lakhs, and it was confirmed. The petitioners preferred an appeal (Appeal No. 21/2006) before the DRT, Ernakulam, wherein interference was declined as per the order dated 17.4.2007. In paragraph No.22 of the said order, it has been observed that the petitioners/appellants having not chosen to challenge the order dated 11.10.2006 (while seeking to set aside the order of sale passed by the recovery officer dtd. 12.10.2006), no interference was possible. This in turn was subjected to challenge by filing Ext.P9 Appeal filed before the DRAT, Chennai. 3. Pursuant to Ext.P9, the DRAT/3rd respondent passed an interim order directing the petitioner to remit a sum of Rs. 5 W.P.(C) No. 20235 OF 2009 3 lakhs by way of two equal monthly installments. The petitioners/appellants satisfied a portion of the amount and filed a petition for extension of time, to remit the balance amount, which however was rejected and the interim stay was vacated, which led to filing of WP (C) 27599 of 2007 inviting Ext.P1 judgment. 4. It is brought to the notice of this Court that, at the time of admission, the petitioners were directed to deposit a sum of Rs. 2.5 lakhs, which was complied with. Subsequently, at the time of extension of the interim order, another sum of Rs. 1 lakh was also paid by the petitioners, thus effecting a total deposit to the tune of Rs. 6 lakhs. At the time of passing Ext.P1 verdict, this Court directed the petitioner to satisfy a further sum of Rs. 5 lakhs and accordingly necessary directions were given to the DRAT to consider the request of the petitioner and have it decided on merits. It is stated that the said condition was also satisfied by the petitioner, thus making a total deposit to the tune of Rs. 11 lakhs. 5. After satisfying the condition as above, the petitioner W.P.(C) No. 20235 OF 2009 4 preferred Ext.P8 restoration application before the 3rd respondent/DRAT, when a defect was pointed out by the Registry, as to the whether any petition to condone the delay was to be filed or not. Even though, the petitioner took steps to rectify the defect pointing out the actual facts and figures, since the office of the 3rd respondent was lying vacant, the matter could not be moved any further. It is brought to the notice of this Court that, the office is still lying vacant, though the charge has been handed over to the DRAT Mumbai, who reportedly does not conduct any sitting at Chennai and as such, the matter is still pending, while the concerned respondents are stated as proceeding with the coercive steps so as to effect physical dispossession. 6. While so, the second respondent approached this Court by filing W.P.(C) No. 18232 of 2009 stating that, pursuant to confirmation of the sale and on losing the battle by the petitioner herein, the recovery officer had ordered to vacate the premises on 17.04.2009. But there after, the concerned recovery officer proceeded on long leave, causing much loss and hardship to the W.P.(C) No. 20235 OF 2009 5 petitioner therein and hence prayed that the matter might be directed to be considered by the other available recovery officer. It was in the said circumstances, that this Court passed Ext. R2 (b) judgment, ordering the matter to be placed before the other available officer, observing that, considering the nature of the relief prayed for and proposed to be granted, there was no necessity to issue any notice to the first and second respondents (petitioners in the present Writ Petition). It is also brought to the notice of this Court that pursuant to Ext. R2(b) judgment, the other available recovery officer proceeded with further steps and Ext. P7 notice was issued, which was affixed at the doors of the petitioners on 17.07.2009, which made the petitioners to approach this Court by filing the present Writ Petition, wherein notice was ordered also granting an interim order of stay for one month, which was subsequently extended on 17.08.2009. 7. The second respondent has filed a counter affidavit , narrating the course and proceedings and also producing copies of the order passed by the recovery officer to vacate the premises as borne by Ext. R2 (a) and also the judgment passed W.P.(C) No. 20235 OF 2009 6 by this Court in W.P.(C) 18232 of 2009 as Ext. R2(b). The learned Sr. Counsel appearing for the second respondent submits that the proceedings filed by the petitioner by way of Writ Petition is not liable to be entertained, as the remedy lies only before the appellate authority, to whom specific directions were already given, as borne by Ext. P1 judgment. 8. The learned Counsel for the petitioner, with reference to the contents of the Writ Petition and also referring to the reply affidavit, submits that earnest efforts have been taken by the petitioners to pursue the appellate remedy and that even though the original order passed by the third respondent was only to deposit a sum of Rs. 'Five lakhs' for granting interim stay so as to entertain the appeal, in view of the subsequent developments, the petitioner has admittedly effected a total sum of Rs. 'Eleven lakhs', despite which, the fate of the petitioners is yet to be decided, causing much loss and hardships to them. 9. The learned Counsel appearing for the respondent Bank placed reliance on the order dated 17.04.2009 passed by the DRT, Ernakulam, copy of which was made available for perusal of W.P.(C) No. 20235 OF 2009 7 this Court, to contend that the course pursued by the Recovery Officer conducting the sale on 12.10.2006 is very much correct and sustainable 10. As obvious from the order passed by the DRT, which forms the subject matter of Ext. P9 appeal, the fact remains that the sale originally notified on 18.09.2006 was adjourned to 11.10.2006 when there were no bidders . It is stated that the sale was adjourned to the very next day and the bid was confirmed in favor of the second respondent for a total sum of Rs.7.3 lakhs. The fact that the second respondent was not available on 11.10.2006 is very much presumable (subject to proof) from the fact that, had he been available on that day, there would not have been any necessity to have the sale adjourned to the next day. Going by the contents of the order passed by the DRT, particularly in paragraph Nos.22 and 23, it is not discernible therefrom, as to the circumstances under which the second respondent came across the fact that the sale was adjourned to 12.10.2006 and whether any other person was also there to compete the bid. Anyhow, the contentions raised by the W.P.(C) No. 20235 OF 2009 8 petitioner in this regard are very much liable to be looked into by the appellate authority and as such, no observation is being made by this Court as to the merits involved. 11. Taking note of the fact that the third respondent happened to dismiss the appeal for not complying with the direction to deposit a sum of Rs.'Five lakhs' and further since, pursuant to the interim orders passed by this Court and also, by virtue of final verdict as borne by Ext. P1, the petitioner has effected a further sum of Rs. six lakhs, thus making payment of a total sum of 'Rs. 11 lakhs ', this Court finds it fit and proper to direct the appellate authority to consider Ext. P9 Appeal on merits and to have a decision, so as to solve the issue once and for all and no further deposit is necessary in this regard. It is made clear that the alleged defect noted by the Registry of the DRAT, Chennai on the ground of delay is not to be acted upon. 13. In the said circumstances, the third respondent is directed to consider and pass appropriate orders on Ex.P9 Appeal in accordance with law, after giving an opportunity of hearing to the petitioners and others concerned, including the W.P.(C) No. 20235 OF 2009 9 second respondent as well as the Bank, which shall be finalised as expeditiously as possible and at any rate within four months from the date of receipt of a copy of the judgment. Since it is brought to the notice of this Court that, the charge of third respondent/Tribunal has already been entrusted to the DRAT, Mumbai, the petitioner will be at liberty to move the said Tribunal with notice to the second respondent as well as to the Bank, for early disposal; which exercise shall be done within a period of one month. It is made clear that till such final orders are passed by the third respondent, or the Tribunal having charge, as aforesaid in Ext.P9 Appeal, all further proceedings to dispossess the petitioners physically shall be kept in abeyance. The Writ Petition is disposed of as above. P.R. RAMACHANDRA MENON, JUDGE. lk