IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN TUESDAY, THE 4TH AUGUST 2009 / 13TH SRAVANA 1931 WP(C).No. 29628 of 2007(B) -------------------------- PETITIONER: -------------------- THE CANARA BANK, REPRESENTED BY ONE OF ITS AUTHORIZED OFFICERS, SRI.K.V.ANIL, AGED 50 YEARS, S/O.(LATE) K.I.VELAYUDHAN, WORKING AS SENIOR MANAGER, ASSET RECOVERY MANAGEMENT BRANCH RAVIPURAM, M.G.ROAD, ERNAKULAM. BY ADV. MR.P.GOPINATH MENON RESPONDENTS: ------------------------ 1. THE DISTRICT COLLECTOR, CALICUT. 2. THE TAHSILDAR (RR), VADAKARA. 3. THE SUPERINTENDENT OF POST OFFICES, VADAKARA. 4. SRI.V.P.ASOKAN, S/O.POKKAN, VADAKEEYIL POYIL HOUSE, CHERAPURAM P.O., CALICUT DISTRICT. BY GOVERNMENT PLEADER SMT. SMITHA SUKUMAR ADV.MR.P.PARAMESWARAN NAIR,ASST.SOLICITOR FOR R3 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 04/08/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 29628 of 2007(B) APPENDIX PETITIONER'S EXHIBITS: EXT.P1 - A TRUE COPY OF THE LETTER ADDRESSED TO THE 1ST RESPONDENT ON 20.2.2007. EXT.P2 - A TRUE COPY OF THE LETTER ADDRESSED TO THE 2ND RESPONDENT ON 20.2.2007. EXT.P3 - A TRUE COPY OF THE LETTER DATED 9.3.2007 FROM THE 2ND RESPONDENT. EXT.P4 - A TRUE COPY OF THE LETTER DATED 9.5.2007 TO THE 2ND RESPONDENT. EXT.P5 - TRUE COPY OF THE LETTER DATED 18.6.2007 FROM THE 2ND RESPONDENT. RESPONDENTS' EXHIBITS: EXT.R3(a) - TRUE COPY OF THE DETAILS OF FRAUDS COMMITTED BY THE 4TH RESPONDENT IN SAVINGS BANK ACCOUNTS FROM 01.02.2005 TO 02.06.2006. EXT.R3(b) - TRUE COPY OF THE ABOVE LETTER RECEIVED FROM THE BANK TOGETHER WITH A COPY OF THE PAY CERTIFICATE. EXT.R3(c) - TRUE COPY OF THE REPLY GIVEN TO THE BANK TO THE REFERENCE BY THIS OFFICE VIDE LETTER NO. BA 8 DATED 28.02.2007. EXT.R3(d) - TRUE COPY OF THE JUDGMENT. // TRUE COPY // PA TO JUDGE rhs S. SIRI JAGAN, J ............................................... W.P(C) No. 29628 of 2007 ................................................. Dated this the 4th day of August, 2009 J U D G M E N T Certain properties belonging to the 4th respondent was mortgaged to the petitioner bank as security for loan amounts given by the petitioner bank to the 4th respondent. The 4th respondent was an employee of the postal department. On allegation of misappropriation of money, proceedings were initiated against him. The misappropriated amounts are sought to be recovered by the respondents 1 to 3 from the 4th respondent. For the same, the respondents 1 to 3 have initiated proceedings for attachment of the very same properties which are mortgaged to the petitioner bank. The same is under challenge before me at the instance of the petitioner bank. The contention of the petitioner is that the properties have been mortgaged to the bank on 26.5.2006. The proceedings against the 4th respondent initiated by the 3rd respondent is subsequent to the same. Therefore the charge of the petitioner on the mortgaged property has priority over any amounts due to the 3rd W.P(C) No. 29628 of 2007 -2- respondent from the 4th respondent. It is under the above circumstances, the petitioner has filed this writ petition seeking the following reliefs: “i) call for the records leading upto Exhibit P.3 & Exhibit P.5 and quash the same by a writ of certiorari or any other appropriate writ, order or direction; ii) issue an order of injunction restraining respondents 1 & 2 from selling the property comprised in Re-Survey No. 79/1 of Chorode Village and disbursing the sale proceeds thereof without satisfying the claim of the petitioner as a secured creditor; iii) declare that the amounts, if any, due to the postal department from the 4th respondent cannot be recovered under the provisions of the Kerala Revenue Recovery Act; iv) declare that the postal department has no claim for priority for its dues over secured creditors like the petitioner-bank.” 2. A counter affidavit has been filed by the 3rd respondent wherein it is stated that the 3rd respondent is entitled to proceed against the 4th respondent under the Public Accountants Default Act, 1850. They also rely on the Division Bench decision of this court in W.A. No. 3536 of 2001 which is produced as Ext.R3(d). They would submit that that judgment was taken in appeal to the Supreme Court and the Supreme Court has confirmed the same. Therefore, according to the 3rd respondent, they are entitled to proceed against the property under the Public Accountants W.P(C) No. 29628 of 2007 -3- Default Act, 1850, which cannot be prevented by the petitioner. 3. I have considered the rival contentions in detail. 4. It is true that by Ext.R3(d) judgment, the right of the postal department for recovering money misappropriated by an employee under the Public Accountants Default Act, 1850 has been recognised. But that does not ipso facto give priority of charge for the amounts due to the postal department as against the previous charge in favour of the petitioner bank in point of time, unless there is a legal provision recognising such priority. The Assistant Solicitor General has not been able to point out to me any legal provision either in the Public Accountants Default Act, 1850 or any other law, by which the postal department can claim priority of charge over the property for money misappropriated by the 4th respondent, as against the mortgage in favour of the petitioner bank. 5. In the above circumstances, I am satisfied that the attachment of the property now effected by the respondents 1 to 3 can have precedence over the charge in favour of the petitioner bank in view of the mortgage executed by the 4th respondent in favour of the petitioner bank as security for loan W.P(C) No. 29628 of 2007 -4- amounts due from the 4th respondent to the petitioner. In the above circumstances, I am satisfied that the proceedings for attachment of the property can only be subject to the right of the petitioner bank to proceed against the property first. Only if the petitioner, on selling the property, realises amounts in excess of loan amounts due to the petitioner from the 4th respondent, the respondents 1 to 3 can claim the balance amounts on the basis of such attachment. It is declared so and the writ petition is disposed of accordingly. S. SIRI JAGAN, JUDGE rhs