IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.GIRI MONDAY, THE 31ST MARCH 2008 / 11TH CHAITHRA 1930 WP(C).No. 32177 of 2007(E) -------------------------- SA.25/2007 of DEBT RECOVERY TRIBUNAL, ERNAKULAM .................... PETITIONERS: ---------------------- 1. M/S.DAVOOD AND COMPANY DOOR. NO.1, DAVOOD CHAMBERS, WEST HILL CHUNGAM, KOZHIKODE, REPRESENTED BY ITS MANAGING PARTNER DAVOOD. 2. DAVOOD,S/O. ABDU RAHIMANKUTTY, AGED 48 YEARS, PEEDIKA THODIKAYIL, CHERUVATTA, KOZHIKODE. 3. NAJMA,W/O.DAVOOD, AGED 38 YEARS, PEEDIKA THODIKAYIL CHERUVATTA, KOZHIKODE. BY ADV. SRI.K.K.CHANDRAN PILLAI SRI.K.S.DILIP SRI.A.S.SAJUSH PAUL RESPONDENTS: ------------------------ 1. THE AUTHORISED OFFICER (UNDER THE SARFAESI ACT) INDIAN OVERSEAS BANK, REGIONAL OFFICE, M.SONS BUILDING, CHEROOTY ROAD, KOZHIKKODE PIN 673 001. 2. THE INDIAN OVERSEAS BANK, REPRESENTED BY ITS SENIOR MANAGER CHEROOTY ROAD, KOZHIKKODE PIN 673 001. 3. ABDUL RAHI, SITHARA COMPLEX, OPPOSITE THALASSERY URBAN CO-OPERATIVE BANK, THALASSERY. 4. DEBTS RECOVERY TRIBUNAL (FOR KERALA AND LAKSHADWEEP) KERALA STATE HOUSING BORAD BUILDING, PANAMPILLY NAGAR, KOCHI-682 036, REPRESENTED BY ITS PRESIDING OFFICER. R2 BY SRI.P.B.SURESH KUMAR, SC,I.O.BANK R3 BY ADV. SRI.ESM.KABEER R4 BY SRI.P.PARAMESWARAN NAIR,ASST.SOLICITOR THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 31/03/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC.NO.32177/2007 E APPENDIX PETITIONER'S EXHIBITS: EXT.P1; COPY OF VALUATION REPORT DTD. 4/10/04 PREPARED BY A VALUER OF GOVERNMENT OF INDIA. EXT.P2: COPY OF POSSESSION NOTICE PUBLISHED BY THE 2ND RESPONDENT DTD. 20/04/06. EXT.P3: COPY OF NOTICE INVITING TENDERS BYTHE 1ST RESPONDENT DTD. 26/02/2007. EXT.P4: COPY OF INTERIM ORDER PASSED BY THIS HON'BLE COURT IN WP(C) 7372/07 DTD. 7/03/2007. EXT.P5: COPY OF SALE NOTIFICATION PUBLISHED BY THE 1ST RESPONDENT DTD. 13/03/2007. EXT.P6: COPY OF CLARIFICATION OF THIS HON'BLE COURT DTD. 18/05/2007 IN WP(C) 7372/07. EXT.P7: COPY OF SECURITISATION APPLICATION FILED BEFORE THE DEBTS RECOVERY TRIBUNAL DTD. 27/12/2006. EXT.P8: COPY OF PETITION WITH AFFIDAVIT FILED BEFORE THE DEBTS RECOVERY TRIBUNAL DTD. 19/05/2007. EXT.P9: COPY OF ORDER DTD. 22/10/2007 PASSED BY THE DEBTS RECOVERY TRIBUNAL IN S.A.25/2007. EXT.P10: COPY OF VALUATION REPORT RELIED ON BY THE 1ST RESPONDENT DTD.21/2/2007. EXT.P11: COPY OF WRITTEN STATEMENT DTD.NIL FILED BY RESPONDENTS 1 AND 2 BEFORE THE DEBTS RECOVERY TRIBUNAL. EXT.P12: COPY OF NOTICE DTD. 1/10/2005. EXT.P13: COPY OF AGREEMENT BETWEEN THE PETITIONER AND THE INTENDING PURCHASER. 2ND RESPONDENT'S EXHIBITS: EXT.R2(A): COPY OF THE NOTICE OF SALE ISSUED TO THE FIRST PETITIONER DTD. 21/08/2006. EXT.R2(B): COPY OF THE POSTAL ACKNOWLEDGEMENT CARD EVIDENCING RECEIPT OF EXHIBIT R2(A) NOTICE BY THE FIRST PETITIONER DTD. 26/08/2006. EXT.R2(C): COPY OF THE MEMO FILED BY THE BANK IN EXHIBIT P7 APPLICATION DTD. 18/06/2007. /TRUE COPY/ P.S.TO JUDGE V.GIRI, J. ------------------------- W.P.(C).No.32177 of 2007 ------------------------- Dated this the 31st day of March, 2008. JUDGMENT The petitioners challenge Ext.P9 order passed by the Debts Recovery Tribunal, Ernakulam dismissing Ext.P7 application filed by the petitioners challenging Ext.P5 notice of sale. 2. The 1st petitioner had availed a loan from the 2nd respondent bank, but had thereafter defaulted repayment of the same. It mortgaged properties including 1.36 acres of land with a residential building and a warehouse. There is a dispute as to whether there is a separate commercial building in the property as well. According to the petitioners, there are four buildings in the mortgaged property. 3. According to the petitioners, the mortgaged properties were taken possession of, by the bank on 20.4.2006. An earlier attempt at sale of the property resulted in W.P.(C)No.7372/07 before this court. Apparently the challenge was on the ground that there was inadequate notice for the sale. This court, by Ext.P4, granted a stay of sale. No doubt, it was made clear that the order will not stand in the way of the respondents from issuing a fresh W.P.(C).NO.32177/07 :: 2 :: notification and conducting the sale with clear 30 days gap between the date of notification and the date of sale. The bank took note of this and by Ext.P5 notice dated 13.03.07 proposed sale of the property on 16.4.2007. Ext.P5 was sought to be stayed by way of I.A.No.6347/07 in W.P.(C)No.7372/07. This court passed Ext.P6 order clarifying that fresh sale, if any, made pursuant to Ext.P4 should be in accordance with law. If there is any illegality in the same, the petitioners will be free to work out his remedy against it in accordance with law. The petitioners took note of Ext.P6 order and challenged Ext.P5 under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 {for short “the Act”} as S.A.No.25/07. Ext.P7 is a copy of the application filed on 7.4.2007. This resulted in Ext.P9 order passed by the Debts Recovery Tribunal on 22.10.2007 dismissing the petitioners' application, essentially on the ground that the petitioners' appeal under Section 17(1) of the Act should have been preferred within 45 days from the date on which the bank had assumed possession of the mortgaged properties under Section 13(4) of the Act. Ext.P9 has been challenged in this writ petition. W.P.(C).NO.32177/07 :: 3 :: 4. Inter alia taking note of the submission, made by the learned counsel for the petitioners that the petitioners have not been dispossessed from the property in question, this court granted a stay of dispossession for a limited period. Notice of admission was ordered to the 3rd respondent. The bank and the auction purchaser have filed separate counter affidavits. 5. The petitioners challenge Ext.P9 order on several grounds. It is contended that the property is not adequately valued. It is submitted there are several structures in the property. It is further contended that a portion of the property would have been sufficient to discharge the debt. There was inadequate publicity and ultimately the property has been sold at a prize, very much below the actual value. The view taken by the tribunal is that the application is barred by limitation. The tribunal did not take note of the fact that the earlier sale itself was challenged before this court. The tribunal also committed an error in holding that the petitioners should have challenged Ext.P5 before this court and not in an appeal under Section 17(1) of the Act. The bank and the auction purchaser, on the other hand submitted, that there was sufficient opportunity for the petitioners to discharge the W.P.(C).NO.32177/07 :: 4 :: debt and redeem the property. Mere challenge against Ext.P5 was inadequate in terms of the provisions of the Act. The cause of action for the petitioners arose when the bank had taken possession of the property on 13.4.2007 and an appeal under Section 17(1) of the Act should have been preferred within 30 days from the said date. The tribunal is not empowered to condone the delay in approaching the tribunal as such, nor was there a challenge against the action initiated under Section 13(4) of the Act. The auction purchaser has filed a counter affidavit adopting this contention. 6. I heard learned counsel for the petitioners Mr.K.K.Chandran Pillai, learned counsel for the Bank Mr.P.B.Suresh Kuar and learned counsel for the auction purchaser Mr.E.S.M.Kabeer. 7. Mr.Chandran Pillai submits that the order is vitiated on several grounds. I am not inclined to consider the correctness of Ext.P9 order for the reason, as rightly pointed out by Mr.P.B.Suresh Kumar, that there is an efficacious remedy against Ext.P9 before the Appellate Tribunal under Section 18 of the Act. All contentions, which have now been raised, apart from certain W.P.(C).NO.32177/07 :: 5 :: contentions which may have to be demonstrated with reference to the factual details, and which are, normally beyond the scope of the jurisdiction of this court under Article 226 of the Constitution of India, can legitimately be pursued before the Appellate Tribunal in an appeal filed under Section 18(1) of the Act. I, therefore, decline to examine the correctness of Ext.P9 order. 8. But, I take note of the fact that the petitioners have a serious contention that the petitioners have been prosecuting this case before this court from 29.10.2007. The petitioners must be given a chance to file an appeal and efficaciously pursue it before the Appellate Tribunal. In the result, the writ petition is disposed of permitting the petitioners to file an appeal against Ext.P9 order under Section 18 of the Act before the Appellate Tribunal. If the appeal is filed within 45 days from today, the same shall be treated as within time. In the facts and circumstances of the case, the interim order passed by this court, staying the dispossession of the petitioners, on 30.10.2007 and extended from time to time and current and operative as on date, shall remain in force for a period of 45 days, within which time, it is up to the petitioners to move before the W.P.(C).NO.32177/07 :: 6 :: Appellate Tribunal for appropriate orders. The further rights of the parties at the interim stage shall be governed by the interim order, if any, to be passed by the Appellate Tribunal. Sd/- (V.GIRI) JUDGE sk/ //true copy// P.S. To Judge