IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOTTATHIL B.RADHAKRISHNAN MONDAY, THE 7TH APRIL 2008 / 18TH CHAITHRA 1930 WP(C).No. 28149 of 2007(A) ---------------------------------------- PETITIONER: --------------------- MOHAMMED HANEEFA, AGED 44, S/O ABDUL KHADER KUNJU, KALLELIL HOUSE, CHERAVALLI, KAYAMKULAM P.O. BY ADV. SRI.P.A.MOHAMMED SHAH RESPONDENTS: ------------------------ 1. REGIONAL MANAGER, STATE BANK OF TRAVANCORE, REGION IV, ZONAL OFFICE, 'SBI BHAVAN', PANAMPILLY NAGAR, ERNAKULAM, COCHIN-36. 2. BRANCH MANAGER, STATE BANK OF TRAVANCORE, CHARUMMOODU, ALAPPUZHA DIST. 3. THE MANAGER, UNITED INDIA INSURANCE COMPANY, MICRO OFFICE, M.C.ROAD, PANDALAM-689501. 4. THE REGISTRAR, DEBT RECOVERY TRIBUNAL, HOUSING BOARD BUILDING, PANAMBILLY NAGAR, ERNAKULAM. *ADDL.R5 IS IMPLEADED: R5. JEEVAN JITH JOSE, AGED 30 YEARS, S/O.JOSE, 50/602, LAL BAHADUR SASTRI ROAD, EDAPPALLY, KOCHI – 25. (*ADDL.R5 IS IMPLEADED AS PER ORDER DTD. 7/04/2008 IN I.A.NO.5052/2008) R1 & R2 BY ADV. SRI. SATHEESH NINAN SRI. SANTHOSH MATHEW R3 BY ADV. SMT.P.A.REZIYA THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 07/04/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss WPC.NO.28149/2007 A APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF THE POLICY SCHEDULE OF UNITED INDIA INSURANCE CO.LTD. DTD. 05/05/2005. EXT.P2: COPY OF JUDGMENT OF THIS HONOURABLE COURT DTD. 02/04/2007 IN WP(C) 11051 OF 2007. EXT.P3: COPY OF THE SALE NOTICE ISSUED BY THE 2ND RESPONDENT DD. 14/06/2007. EXT.P4: COPY OF THE UN REPORT FILED BY THE DYSP (NARCOTIC CELL), ALAPPUZHA DTD. 07/05/2007. EXT.P5: COPY OF THE PETITION FILED BY THE PETITIONER TO THE 2ND RESPONDENT DTD. 07/09/2007. RESPONDENT'S ANNEXURE: ANNEXURE R5(A): COPY OF THE LETTER NO.AGM/IV(E)/272 DTD. 19/11/2007 ISSUED BY THE AUTHORISED OFFICER. /TRUE COPY/ P.A.TO JUDGE Kss THOTTATHIL B. RADHAKRISHNAN, J. ----------------------------------------------- W.P.(C) No. 28149 OF 2007 and I.A. No. 5052 of 2008 ----------------------------------------------- Dated this the 7th day of April, 2008 JUDGMENT Impleading petition allowed. 2. The additional respondent is the auction purchaser of an item of property which was put to sale by respondents 1 & 2 under the provisions of the SARFAESI Act on account of the default in repayment of a loan by the petitioner. 3. The petitioner has a jewellery. He availed the loan for business purpose. The 3rd respondent, insurer, had issued a burglary cover. The petitioner had an outstanding claim on account of an incident of theft from the jewelery. Faced with SARFAESI proceedings, he filed this writ petition, a second round one, on the ground that the burglary insurance claim was still pending consideration by the insurer. Following the interim directions, the insurer quantified the insurance amount as Rs.14,10,669/- and the same was credited into the loan account of WPC No. 28149 OF 2007 2 the bank on 13.03.08. Even before the institution of the writ petition, the bank had put one of the items of security assets to sale. This was purchased in auction by the additional respondent and he remitted 25% of the purchase price on 29.08.07. The bank desisted from collecting the balance amount in view of this litigation. 4. With the passage of time, it has now come out that the insurance amount as offered by the 3rd respondent, insurer, would be insufficient to discharge the debt. The petitioner is stated to be appealing against the stand of insurer. 5. The impleaded respondent states, quite fairly, that if there is genuine attempt by the petitioner to save the property from distress action, he would not sand in the way of sale, provided, he is appropriately compensated for the investment made by him and in that event, he is prepared to withdraw from the sale. 6. Learned counsel for the petitioner stated that the attempt WPC No. 28149 OF 2007 3 of the petitioner will only be to pay the entire outstandings and liquidate the loan transaction. Having regard to the fact that the insurer has accepted the case of the petitioner as regards the burglary claim, it is urged that the bank may be directed to give the petitioner the maximum available ameliorative reliefs. For the aforesaid reasons and leaving open all contentions of the parties, this writ petition is ordered in the following manner: i) The petitioner will make a representation to the competent authority, among respondents 1 and 2, producing a copy of this judgment, seeking such ameliorative benefits as may be available, in accordance with law. ii) If representation, as aforesaid, is made within a period of two weeks from now the same will be considered and the bank will issue a statement regarding the amounts necessary to liquidate the outstandings, treating the sale in favour of the additional respondent as not having taken place, but after giving credit to all payments made. iii) The petitioner shall deposit the amounts as demanded by WPC No. 28149 OF 2007 4 the bank as per the aforesaid statement, within one month thereafter and shall also pay through the bank to the additional respondent interest at the rate of 21% per annum, on the amount deposited by the additional respondent, from the date of such deposit till date of disbursement. If the petitioner satisfies the aforesaid condition, the bank shall return the money invested by the additional respondent and close the transaction appropriately. iv) Otherwise, the bank will be at liberty to confirm the sale in favour of the additional respondent and further proceed with the recovery action against the petitioner without any further notice and in such event, the Bank (respondents 1 and 2) and the additional respondent will be entitled to Rs.10,000/- each towards cost of this writ petition. THOTTATHIL B. RADHAKRISHNAN, JUDGE ttb WPC No. 28149 OF 2007 5 WPC No. 28149 OF 2007 6 WPC No. 28149 OF 2007 7