IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON THURSDAY, THE 9TH JUNE 2011 / 19TH JYAISHTA 1933 RP.No. 325 of 2011(B) --------------------- AGAINST THE JUDGEMENT IN WPC.10932/2007 Dated 09/03/2010 .................... REVIEW PETITIONER(S): PETITIONER/1ST RESPONDENT ----------------------------------------------- DENA BANK, 4, RAJADHANI BUILDING, EAST FORT, THIRUVANANTHAPURAM-695023, REPRESENTED BY ITS BRANCH MANAGER. BY ADV. SRI.PHILIP T.VARGHESE SRI.THOMAS T.VARGHESE RESPONDENT(S): PETITIONER AND 2ND RESPONDENT -------------------------------------------- 1. KERALA STATE HOUSING BOARD, REPRESENTED BY ITS REGIONAL ENGINEER, PANAMPILLY NAGAR, ERNAKULAM,KOCHI-682016. 2. PREETHI V KAMNANI, FLAT NO.EF7-121, PUNNAKKAL THOPE, H.S.A. SITE, SWATHI NAGAR, THIRUVANANTHAPURAM-695023. ADV. SRI.A.JAYASANKAR, SC KSHB, TVM FOR R THIS REVIEW PETITION HAVING COME UP FOR ADMISSION ON 09/06/2011, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: RP.No. 325 of 2011 APPENDIX ANNEXURE A1- TRUE COPY OF LETTER DATED 12.1.11 ISSUED BY THE PETITIONER TO THE 1ST RESPONDENT ANNEXURE A2- TRUE COPY OF RECEIPT DATED 12.1.11 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER ANNEXURE A3- TRUE COPY OF LETTER DATED 14.2.11 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER (TRUE COPY) P.A TO JUDGE P.R.RAMACHANDRA MENON, J ....................................................... R.P.325/2011 in W.P.(C).10932/2007 .............................................. Dated this the 9th day of June, 2011 ORDER This Review Petition has been filed by the Bank, who was the first respondent in W.P.(C).10932/2007, which was disposed of, as per judgment dated 9.3.2010, taking note of the settlement stated as arrived at between the writ petitioner/Board and the Bank. 2. The minimum factual data required for the purpose of disposal of this case is that the property concerned was allotted in favour of the second respondent by the writ petitioner/Board, to whom much liability was subsisting. The allottee wanted to borrow some amount from the respondent/Bank upon which, consent was given by the Board agreeing to create security interest over the same; based on which the loan amount was disbursed. Since the due amount was not cleared on time, the Bank proceeded with further steps for sale of the property, where the Housing Board sought to interfere with the same by filing the writ petition. Despite service of notice, the allottee did not turn up. In the meanwhile, a settlement was arrived at R.P.325/11 2 between the Bank and the Board, whereby the Bank volunteered to discharge the liability of the allottee to the Board and the dispute was settled by filing a 'joint memo'. The Board was ready to execute a 'sale deed' in favour of the Bank. After hearing the parties concerned, the writ petition was disposed of, enabling the Bank to clear the liability, directing the Board to give the 'discharge certificate' to the Bank and enabling the Bank to proceed against the property concerned, in accordance with the relevant provisions of law. No specific direction was given to execute any 'sale deed'; hence is sought to be rectified by filing the Review Petition. The review petitioner submits that the Board is refusing to execute the 'sale deed' in favour of the Bank, despite the agreement. 3. As per the relevant provisions of law, particularly the SARFAESI Act, if at all any default is committed by the borrower, the Bank of course, is entitled to proceed against the property. The property can be put to sale by way of public auction or such other manner as specified therein and the balance amount, after settling the liability, is liable to be returned as per Section 13(7) of the SARFAESI Act, 2002. In the instant case, the total liability of the allottee to the Board was R.P.325/11 3 nearly Rs.1,36,107/- and the remaining liability, when the writ petitioner approached this Court, was Rs.88,675/- which admittedly has been satisfied by the Bank. If the prayer of the Bank that, having discharged the outstanding liability of the allottee, the Board is to execute the 'sale deed' in favour of the Bank is accepted, it is likely that the same may result in extending undue advantage to the Bank (in view of the meagre sale consideration of Rs.88,675/- and the amount due under the loan), which was not intended by this Court and hence, no positive direction was given to execute the 'sale deed'. As such, there is no error apparent on the face of record, which is liable to be cleared by invoking the power of review. 4. However, it is evident that, by discharging the outstanding liability of the allottee to the Board (as volunteered by the Bank), the Bank stands in a better position to proceed against the property, over which, the security interest is created; more so, when such liability was created with the consent and concurrence of the Housing Board. The Bank has every right to proceed against the property for realization of the amount due under the loan and also the amount which has now been satisfied by the Board on behalf of the allottee. The property R.P.325/11 4 can be proceeded against as specified under the relevant provisions of the Enforcement Rules, and the balance amount, if any, resulted because of the public auction, shall be returned in the manner as specified therein. The first respondent/Board is bound to execute all the necessary documents, so as to convey the title to the party concerned on sale; which shall be done within 'two weeks' from the date of submission of the relevant proceedings, if the same is otherwise in order in all respects. Review petition is disposed of. P.R.RAMACHANDRA MENON, Judge mrcs