IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOTTATHIL B.RADHAKRISHNAN WEDNESDAY, THE 26TH NOVEMBER 2008 / 5TH AGRAHAYANA 1930 WP(C).No. 34972 of 2008(L) -------------------------- CMP.5091/2008 of C.J.M.,KOTTAYAM .................... PETITIONER(S): --------------- N.K.DAMODARAN, AGED 58 YEARS, S/O. KUNJUAN, NIRAPPIL (H),MONIPPALLY VILLAGE, MEENACHIL TALUK, KOTTAYAM. BY ADV. SRI.JIJO JOSEPH RESPONDENT(S): --------------- 1. STATE BANK OF TRAVANCORE KOZHA, REPRESENTED BY CHIEF MANAGER (ADV) P.D.THOMAS, REGION ZONAL OFFICE, KOTTAYAM. 2. BRANCH MANAGER, STATE BANK OF TRAVANCORE KOZHA 3. MARRY JOH, ADVOCATE COMMISSIONER, ADVOCATE, KOTTAYAM. 4. P.S.SAJIMON, PUTHEN PARAMBIL (H) PERUMTHURUTH KALLARA P.O. R1, R2 BY ADV.SRI.R.S.KALKURA, S.C. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 26/11/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: THOTTATHIL B.RADHAKRISHNAN, J. ------------------------------------------- W.P(C).No.34972 OF 2008 ------------------------------------------- Dated this the 26th day of November, 2008 JUDGMENT Standing counsel appears for respondents 1 and 2. Notice to the third respondent dispensed with. Notice to the 4th respondent dispensed with preserving his right to move for review of this judgment, if aggrieved. 2. Petitioner's case is that as per Ext.P1 dated 10.10.2007, he purchased an item of property from the 4th respondent without knowing that the said person is indebted to the first respondent bank. Going by Ext.P3 plaint, the 4th respondent had availed a loan of Rs.5 lakhs as a cash-credit facility on 16.7.2002 and had created equitable mortgage by depositing the title deed of the property in question. From Ext.P4 it is evident that the account became an NPA, was so classified and notice under Section 13 (2) of the SARFAESI Act was issued on 16.1.2008, following which, Sections 13 (4) and 14 have been invoked and the Chief Judicial Magistrate has appointed an advocate as Commissioner WPC.34972/08 Page numbers to enforce dispossession. In the aforesaid scenario, it cannot but be conceded by the petitioner that his right could, at the best, be only to seek intervention to issue a protective order against dispossession for a short time since the security interest created by way of mortgage was long before the sale in his favour and any bonafide transfer, even for valuable consideration, is no defence in defeasance of the mortgage and the right of the mortgagee for sale of the security interest. Even if any rights were created in terms of the Transfer of Property Act, they stand excluded by the operation of the provisions contained in the SARFAESI Act. Therefore, there is no merit in the contention of the petitioner on the strength of his title based on Ext.P1 sale. Repelling all the contentions and taking note of the fact that Ext.P3 suit is in its primitive stage and Ext.P4 proceedings under section 14 of the SARFAESI Act has germinated on the basis of notice under Section 13 (2) issued on 16.1.2008, it is ordered that the impugned distress action will stand deferred if WPC.34972/08 Page numbers the petitioner remits Rs.1,00,000/- within 10 days and an amount of Rs.2,00,000/- on or before the last working day of December, 2008 and continues to remit amounts at the rate of Rs.1,00,000/- per month, payable on or before the last working day of every month commencing from January, 2009 and thereby wipes off the entire outstandings including accruals. However, if there is default in remitting any of the instalments as aforesaid, the benefit of this judgment shall stand recalled automatically and distress action shall follow. It is also clarified that this judgment does not preclude the petitioner to sue the 4th respondent for compensation and other reliefs in accordance with law, in view of the payments being made by the petitioner under distress. The writ petition is ordered accordingly. Sd/- THOTTATHIL B.RADHAKRISHNAN, Judge. kkb.