IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON TUESDAY, THE 9TH MARCH 2010 / 18TH PHALGUNA 1931 WP(C).No. 10932 of 2007(B) ----------------------------------------- PETITIONER(S): ------------------------- KERALA STATE HOUSING BOARD, REPRESENTED BY ITS REGIONAL ENGINEER, PANAMPILLY NAGAR, ERNAKULAM, KOCHI - 682 016. BY ADV. MR.A.JAYASANKAR, SC, KSHB RESPONDENT(S): ---------------------------- 1. DENA BANK, REPRESENTED BY ITS MANAGER, TRIVANDRUM BRANCH, T.C.NO.37/1392, 4 RAJADHANI BUILDINGS, EAST FORT, TRIVANDRUM-695 023. 2. SMT. PREETHI V KAMNANI, FLAT NO. EF7-121, PUNNAKKAL THOPE H.S(A)SITE, SWATHI NAGAR, TRIVANDRUM-23. R1 BY ADVS. MR.PHILIP T.VARGHESE, MR.THOMAS T.VARGHESE. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 09/03/2010,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss WPC.NO.10932/2007 B APPENDIX PETITIONER'S EXHIBITS: P1: COPY OF NOTICE DTD. 10/08/2006 ISSUED BY THE 1ST RESPONDENT. P2: COPY OF NOTICE DTD. 22/02/2007 ISSUED BY THE 1ST RESPONDENT. P3: COPY OF NOTICE DTD. 26/02/2007 ISSUED BY THE 1ST RESPONDENT. P4: COPY OF LETTER DTD. 24/03/2007 SENT BY THE PETITIONER. P5: COPY OF THE NOTICE DTD. 26/06/2009 IN KERALA KAUMADI DAILY DTD. 02/07/2009 INVITING SEALED TENDERS FOR SELLING FLAT. RESPONDENT'S EXHIBITS: R1(A): COPY OF TRANSFER AGREEMENT DTD. 16/11/1998. R1(B): COPY OF CERTIFICATE DTD. 23/05/2001 ISSUED BY THE PETITIONER. /TRUE COPY/ P.A.TO JUDGE Kss P.R.RAMACHANDRA MENON, J --------------------------- W.P(C) No.10932 of 2007-B ---------------------------- Dated this the 9th day of March, 2010. J U D G M E N T This Writ Petition has been filed by the Kerala State Housing Board, being aggrieved of the steps taken by the first respondent Bank for causing the property in question to be sold in public auction, invoking the machinery under the SARFAESI Act, in connection with the amount stated as due to the first respondent from the second respondent under a loan transaction. 2. The specific case put forth by the petitioner is that a particular 'flat' was alloted to the second respondent reserving the rights and liberties over the property in question. Subsequently, the second respondent wanted to avail a loan from the first respondent Bank creating security interest over the very same property. On filing the necessary proceedings, requisite sanction was given by the petitioner for creating such rights, without prejudice to the rights and interests of the petitioner, subject to which the loan facility was provided by the first respondent. Later, when the second respondent turned to be a defaulter, the first respondent Bank W.P(C) No.10932 of 2007-B 2 proceeded with further steps under Section 13 of the SARFAESI Act, which has been subjected to challenge by the petitioner in this Writ Petition. 3. The learned counsel for the petitioner submits that the first respondent is not having any better right or interest than the petitioner to proceed against the property in question, more so when the title of the property has not been conveyed/transferred to the second respondent in so far as the liability of the second respondent to the petitioner stands undischarged. Since the notice sent to the second respondent was returned unserved, the petitioner had to complete the service of notice by 'paper publication'. Even after the paper publication, the second respondent has not chosen to appear before this Court. 4. In the course of the proceedings as above, the dispute between the petitioner and the first respondent Bank has been settled and a 'joint memo' has been filed before this Court, whereby it has been agreed by the first respondent Bank that the entire liability of the second respondent towards the petitioner will be cleared by the respondent Bank, on which event the petitioner has agreed to accept the payment so offered by the first respondent and to execute a sale deed pertaining to Flat No.EF7-121 directly to the W.P(C) No.10932 of 2007-B 3 first respondent Bank or its nominee, subject to the orders to be passed by this Court. Since the second respondent has not chosen to enter appearance, despite the service of completion of notice it is quite evident that the second respondent is no more interested with the cause of action relating to the rights and liberties in any manner. 5. In the above circumstances, first respondent Bank is permitted to clear the entire liability of the second respondent due to be discharged to the petitioner and on satisfaction of the same, the first respondent will be permitted to issue a 'certificate of discharge' in respect of the liability of the second respondent. On obtaining the said discharge certificate, the first respondent is at liberty to proceed with further steps for causing the property over which security interest has been created by taking possession and also by causing the same to be sold in public auction as contemplated under the relevant provisions of the SARFAESI Act. This will be without prejudice to the rights and liberties available to the second respondent to challenge the sale proceedings if the same is vitiated in any manner; by resorting to the statutory remedy. The Writ Petition is disposed of. Sd/- P.RAMACHANDRA MENON, JUDGE ab