IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC THURSDAY, THE 21ST AUGUST 2008 / 30TH SRAVANA 1930 WP(C).No. 17631 of 2008(Y) ------------------------------------- PETITIONER: ------------------ TRIVANDRUM INTERNATIONAL HEALTH SERVICES LTD., REPRESENTED BY MANAGING DIRECTOR, EMMANUEL MATHEW, SUT HOSPITAL BUILDING, PATTOM, THIRUVANANTHAPURAM. BY ADV. SRI.P.GOPALAKRISHNAN NAIR RESPONDENTS: ------------------------ 1. INDIAN OVERSEAS BANK, REPRESENTED BY AUTHORISED OFFICER, GENERAL HOSPITAL JUNCTION, THIRUVANANTHAPURAM. 2. VANCHINAD HOSPITALS LTD., REPRESENTED BY MANAGING DIRECTOR, PONGUMOODU, MEDICAL COLLEGE P.O. THIRUVANANTHAPURAM. 3. MEDICAL MISSION TRUST, REPRESENTED BY MANAGING TRUSTEE, PAMBAN MADHAVAN ROAD, TALAP, KANNUR. ADV. SRI.P.B.SURESH KUMAR, SC,I.O.BANK FOR R1 SRI.DINESH MATHEW J. MURICKAN FOR R3 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 21/08/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) NO.17631/2008 APPENDIX PETITIONERS EXHIBITS EXT.P1:- COPY OF THE POSSESSION NOTICE DT. 9.5.07 ISSUED BY THE IST RESPONDENT. EXT.P2:- COPY OF THE JUDGMENT OF THIS HONOURABLE COURT IN WA. NO.1298/07 DT. 6.6.07. EXT.P3;- COPY OF THE NOTICE DT. 8.10.07 ISSUED BY THE IST RESPONDENT TO THE 3RD RESPONDENT. EXT.P4:- COPY OF THE LETTER NO. DGM/T/C&I/ DT. 29.2.08 TO THE IST RESPONDENT. EXT.P5:- COPY OF THE LETTER NO.REF. VAN/1/07-08 DT. 4.3.08 ISSUED BY THE IST RESPONDENT. EXT.P6:- COPY OF THE LETTER NO. DGM/T/C&I/ DT. 4.3.08. EXT.P7:- COPY OF THE LETTER NO. REF. VAN/2/07-08 DT. 6.3.08 ISSUED BY THE IST RESPONDENT. EXT.P8:- COPY OF THE LETTER NO.CO/0308/093 DT,. 21.3.08 OF THE PETITIONER. EXT.P9:- COPY OF THE LETTER NO.DGM/T/C&I/1552 DT. 26.3.08. EXT.P10:- COPY OF THE LETTER NO.CO/0308/095 DT. 31.3.08. EXT.P11:- COPY OF THE LETTER DT. 28.5.08 OF THE IST RESPONDENT. EXT.P12:- COPY OF THE LETTER NO.CO/0608/110 DT. 5.6.08 TO THE IST RESPONDENT. RESPONDENT'S EXHIBITS EXT.R1(a):- COPY OF THE LETTER SISUED BY THE 2ND RESPONDENT TO THE IST RESPONDENT DT. 29.2.2008. EXT.R1(b):- COPY OF THE LETTER ADDRESSED TO THE IST RESPONDENT BY THE 2ND RESPONDENT DT. 1.3.2008. EXT.R1(c):- COPY OF THE LETTER ADDRESSED TO THE BORROWER AND COPY MARKED TO THE PETITIONER DT. 28.5.08. EXT.R2(a):- COPY OF THE AGREEMENT DT. 11.1.2008. EXT.R2(b):- COPY OF THE AGREEMENT DT. 1.3.2008. EXT.R2(c):- COPY OF THE CONSENT LETTER. EXT.R3(a):- COPY OF THE LETTER ISSUED BY THE IST RESPONDENT TO THE 3RD RESPONDENT DT. 7.5.2007. /TRUE COPY/ P.S. TO JUDGE tss ANTONY DOMINIC, J. ==================== W.P.(C) NO. 17631 of 2008 (Y) ==================== Dated this the 21st day of August 2008. J U D G M E N T The controversy in this writ petition is regarding conclusion of a private treaty sale in favour of the petitioner in a proceeding initiated by the 1st respondent against the 2nd respondent under the Securitisation and Re-Construction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as “the Act” for short). 2. The secured asset that was offered for sale and described in Ext.P1 possession notice is a hospital building and other items belonging to the 2nd respondent, and is presently on lease to the 3rd respondent. On conclusion of the proceedings under the Act, the Bank had issued Ext.P1 possession notice and at a later stage, the petitioner offered to buy the property on a private treaty basis. However, the deal could not be concluded as the Petitioner and its Bank insisted that the 1st respondent should W.P.(C)No.17631/2008 - 2 - deliver vacant possession of the assets, on its sale to the petitioner, while, on the other hand, the 1st respondent Bank insisted that they will not take over and deliver vacant possession of the Secured Assets to the petitioner, evicting the 3rd respondent, but will deliver symbolic possession. It is this controversy that led to the filing of this writ petition. 3. As far as the 3rd respondent’s right to continue possession of the building in question is concerned that issue is concluded against them by Ext.P2 judgment rendered by a Division Bench of this Court. What led to the judgment is that contending that irrespective of the securitization proceedings initiated against the 2nd respondent, a tenant, being they could be evicted only by taking recourse to the provisions of the Rent Control Act, the 3rd respondent filed W.P.(C) No. 14990/2007 before this Court. That writ petition was dismissed by a learned Single Judge taking the view that the provisions contained in the Act will prevail over the Rent Control Act and that the 3rd respondent was liable to be evicted. That judgment of the Learned Single Judge was confirmed by a Division Bench of this Court by dismissing W.A.No. 1298/2007 W.P.(C)No.17631/2008 - 3 - filed by the 3rd respondent. In view of these judgments, the 3rd respondent is liable to be evicted in terms of the provisions contained in the Act and it is therefore open to the Bank to initiate necessary steps in this regard. In fact, apparently releasing their limitations, the counsel for the 3rd respondent did not contradict this position. 4. After this writ petition was argued at some length, there arose the possibility of a settlement when the Bank offered that subject to compliance of certain conditions suggested by them, they are willing to initiate action for taking over possession of the secured assets agreed to be sold and deliver vacant possession to the petitioner. Thereupon, this Court directed the parties to discuss the matter and the Bank was also directed to file a statement containing the terms agreeable to it. 5. Accordingly, the Bank has filed a statement and broadly the terms regarding payment and delivery are the following: (i) That the petitioner shall remit the balance sum of Rs.9 crores 75 lakhs with interest at the rate of 15% per annum from April 2008 to June 2008, amounting to W.P.(C)No.17631/2008 - 4 - Rs.36,46,240/- on or before 31.8.2008. (ii) That on payment as above, the Bank is prepared to take over vacant possession of the secured assets referred to in Ext.P1 notice and handover the same to the petitioner. 6. The learned counsel for the petitioner, while accepting the principal amount payable, submitted that since the delay in finalizing the sale was not on account of their fault, they should not be made liable for interest for the period April 2008 to June 2008 and, at any rate, he pleaded that the rate of interest is on the higher side. This was debated with the learned counsel appearing for the Bank and as suggested by both sides, with the liberty that both parties have given to the court to fix a reasonable amount towards interest, it is directed that in addition to Rs.9.75 crores, the petitioner shall pay lump sum amount of Rs.25 lakhs towards interest. I record that both sides have agreed to the said amount fixed by this Court. 7. In so far as the date of payment is concerned, the learned counsel for the petitioner justifiably submitted that the time fixed in the statement for payment is too short. That again was discussed W.P.(C)No.17631/2008 - 5 - and it has been agreed by the Bank that if payment of Rs.10 crores is made on or before 15.9.2008, that is acceptable to the 1st respondent Bank. The petitioner has agreed to this suggestion and has undertaken to pay the full amount on or before 15.09.008. 8. Now what remains to be resolved is the manner in which further action is to be taken by the Bank, once payment is made by the petitioner. It is seen from the statement filed by the Bank that it has already filed CMP No.3176/2008 before the Court of Chief Judicial Magistrate, Thiruvananthapuram, for an order under Section 14 of the Act in order to take possession of the secured assets. This again was discussed in Court, and as agreed to by both sides, the following directions are issued:- (a) In view of the pendency of the application under Section 14 of the Act as above, the Bank shall proceed with the matter in order to ensure that the proceedings before the Court and the further necessary action is completed on an expeditious basis. (b) In order to expedite the proceedings before the Court of Chief Judicial Magistrate, Thiruvananthapuram, it is also directed that it will open to the Bank to produce a copy of this W.P.(C)No.17631/2008 - 6 - judgment and request the learned Magistrate to conclude the proceedings on an expeditious basis. (c) Once the petitioner makes payment of Rs.10 crores, on or before 15.09.2008, in full and final settlement of the entire claims of the Bank, the Bank shall immediately take over possession of the secured assets mentioned in Ext.P1 possession notice in pursuance to the order to be obtained from the Court of Chief Judicial Magistrate, Thiruvananthapuram, in CMP No. 3176/2008 and thereupon shall deliver vacant possession of the secured assets to the petitioner, along with the sale certificate as contemplated in the Act. This process shall be completed by the Bank immediately and without any delay. 9. Learned counsel for the petitioner expressed his apprehension that by lapse of time, many of the articles available in the hospital would have been pilfered or destroyed. This certainly is not a matter which can be agitated or decided in this writ petition. Therefore, I clarify that in case any item which is included in the inventory prepared by the Bank and agreed to be sold to the W.P.(C)No.17631/2008 - 7 - petitioner is not available at the time of delivery, it will be open to the petitioner to work out their claims in appropriate proceedings and any such claim is left open. 10. It is clarified that in case the petitioner makes default in making payment as agreed above, the petitioner will not be eligible for any of the reliefs granted by this judgment and with such default, the writ petition will stand automatically dismissed. 11. I also record that this compromise was arrived at with the active participation and involvement of the 2nd respondent, which had by its Ext.R1(a) letter, requested the Bank to proceed under the Act for realisation of its dues. Writ petition is disposed of as above. ANTONY DOMINIC, JUDGE mt/jan.