IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON WEDNESDAY, THE 16TH JUNE 2010 / 26TH JYAISTHA 1932 WP(C).No. 20710 of 2009(G) ------------------------------------- PETITIONER(S): ------------------------- SAHADEVAN, AGED 65 YEARS, S/O.VELAYUDHAN, PADINJAREMALIYIL, ELOOR VILLAGE, MANJUMMEL PO, BY ADV. SRI.GIKKU JACOB RESPONDENT(S): ------------------------ 1. AUTHORISED OFFICER, HOUSING DEVELOPMENT FINANCE CORPORATION, HDFC HOUSE, PO BOX NO.1667, RAVIPURAM, JUNCTION, MG ROAD, KOCHI-15. 2. P.J.STALIN, PARAYIL HOUSE, THALLAPALLI ROAD, ERAMALLOOR PO, ALAPPUZHA 688 533. 3. SUB INSPECTOROF POLICE, ELOOR POLICE STATION. R1 BY ADV. SRI.K.K.CHANDRAN PILLAI, SC, HDFC THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 16/06/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) NO.20710/2009 APPENDIX PETITIONER'S EXHIBITS P1:- COPY OF THE MEDICAL CERTIFICATE. P2:- COPY OF THE AGREEMENT DTD. 17.12.2008. P3:- COPY OF THE SAID CHEQUE DTD. 25.3.2009 DRAWN ON UCO BANK M.G.ROAD, ERNAKULAM. P4:- COPY OF THE PROMISSORY NOTE. P5:- COPY OF THE AGREEMENT DTD. 25.3.2009 ALSO EXECUTED BY THE 2ND RESPONDENT AND PETITIONER. P6:- COPY OF THE NOTICE DTD. 20.5.2009 AFFIXED BY THE BANK ON THE RESIDENTIAL PROPERTY OF PETITIONER. P7:- COPY OF THE PETITION DTD. 18.7.2009 SUBMITTED BY THE PETITIONER BEFORE 3RD RESPONDENT. P8:- COPY OF THE POSSESSION NO NOTICE DTD. 10.11.2009. P9:- COPY OF THE COUNTER AFFIDAVIT FILED BY THE PETITIONER DTD. 11.11.2009 BEFORE THE CHIEF JUDICIAL MAGISTRATE COURT, ERNAKULAM. RESPONDENT'S EXHIBITS R1(a):- COPY OF THE ORDER DTD. 9.11.2009 PASSED BY THE CHIEF JUDICIAL MAGISTRATE COURT, ERNAKULAM. R1(b):- COPY OF THE MEMO ISSUED BY THE CHIEF JUDICIAL MAGISTRATE COURT, ERNAKULAM, TO THE 3RD RESPONDENT DTD. 9.11.2009. R1(c):- COPY OF THE ISSUED BY THE CHIEF JUDICIAL MAGISTRATE COURT, ERNAKULAM, TO THE VILLAGE OFFICER, ELOOR. R1(d):- COPY OF THE REPORT FIELD BY THE ADVOCATE COMMISSIONER DTD. 18.11.2009. R1(e):- COPY OF THE RECEIPT ISSUED BY THE SUB INSPECTOR OF POLICE ELOOR DTD. 12.11.2009. R1(f):- COPY OF THE COMPLAINT FILED BEFORE THE 3RD RESPONDENT BY THE JUNIOR OFFICER(LEGAL) OF THE H.D.F.C. DTD. 13.11.2009. R1(g):- COPY OF THE RECEIPT ISSUED BY THE 3RD ON RECEIPT OF EXT.R1(f). R1(h):- COPY OF THE AFFIDAVIT FILED BY THE PETITIONER BEFORE THE CHIEF JUDICIAL MAGISTRATE COURT, ERNAKULAM, DTD. 11.11.09. R1(i):- COPY OF THE PROCEEDINGS (B-DIARY) OF M.P.8500/09 OF THE CHIEF JUDICIAL MAGISTRATE COURT. TRUE COPY P.A. TO JUDGE tss P.R.RAMACHANDRA MENON, J --------------------------- W.P(C) No.20710 of 2009-G ---------------------------- Dated this the 16th day of June, 2010. J U D G M E N T The petitioner, who is a stranger to the loan transaction with the respondent Bank, has filed this Writ Petition seeking for a direction to allow the petitioner to remit the arrears of the loan on behalf of the second respondent/borrower, if the same is not remitted by him within a reasonable time and to effect the future instalments on the respective due dates and for some incidental reliefs. 2. The sequence of events as described by the learned counsel for the petitioner is that the property, which originally belonged to the petitioner, was sold to the second respondent for valuable sale consideration. It is stated that the second respondent had borrowed some amount from the respondent Bank for purchasing this property from the petitioner, creating security interest over the property in question. But the entire sale price payable to the petitioner is stated as not satisfied, under which circumstances, there is some arrangements between the petitioner W.P(C) No.20710 of 2009-G 2 and the second respondent/borrower; based on which, the petitioner is continuing to occupy the premises. 3. While so, since the second respondent did not satisfy the liability to the first respondent Bank, the account was declared as 'NPA' and the Bank proceeded with steps under the SARFAESI Act to take physical possession of the premises and to have the same sold in public auction. It was in the said circumstances, the petitioner approached this Court by filing the above Writ Petition seeking for a direction to permit the petitioner to clear the liability on behalf of the second respondent and to have the loan account regularised. 4. The learned counsel for the Bank submits with reference to the contends of the counter affidavit that, the petitioner has filed the Writ Petition without revealing the true state of affairs and in a clandestine manner, colluding with the second respondent. After considering the matter on admission, this Court ordered notice on 23.7.2009 and since there was no interim order of stay, the Bank proceeded with further steps by filing a petition under Section 14 of the SARFAESI Act before the Chief Judicial Magistrate’s Court, Ernakulam, for rendering necessary assistance to take physical possession of the building. The property along with the building W.P(C) No.20710 of 2009-G 3 was taken possession of and handed over to the respondent Bank and the Advocate Commissioner filed a report before the Chief Judicial Magistrate’s Court, complying with the direction, as borne by Ext.R1(d). 5. The case of the respondent Bank is that, subsequent to taking over the possession as above and inspite of placing a security guard at the premises, the petitioner herein took the law into his hands; threatened and drove away the security guard; forcefully took over the possession of the building and started living there, which made the Bank to file complaints before the Police, as borne by Exts.R1(e) and (f). The Bank also filed a petition before the Chief Judicial Magistrate’s Court pointing out the sequence of events, which is stated as already heard and reserved for orders. 6. The learned counsel for the Bank submits that the petitioner does not have any ‘locus standi’ to file this Writ Petition, more so, in view of the fact that the property was sold by the petitioner himself to the second respondent and the sale consideration, to an extent of Rs.21 lakhs was provided by the Bank by way of crossed cheque, in the name of the petitioner by way of the loan facility extended to the second respondent/borrower, on W.P(C) No.20710 of 2009-G 4 the strength of the security interest created over the property by the purchaser ie. the second respondent. 7. The learned counsel for the petitioner submits that the proceedings finalised by the Bank were behind the petitioner and that the rights and interests of the petitioner, over the rights of the second respondent, are not liable to be adversely affected in any manner. This Court finds it difficult to accept the version of the petitioner. The sale effected by the petitioner in favour of the second respondent is complete. The second respondent/borrower created security interest over the property in question in connection with the loan availed from the Bank. The amount of sale consideration disbursed by the Bank was directly to the petitioner by way of crossed cheque, as agreed among the parties. The cause of action sought to be agitated on the basis of the alleged rights between the petitioner and the second respondent, can’t thwart the rights and liberties of the Bank under the SARFAESI Act. In other words, the cause of action for the petitioner, if any, in respect of the alleged non-payment of the sale consideration by the second respondent, is entirely different from the cause of action being pursued by the Bank in connection with the loan extended to the W.P(C) No.20710 of 2009-G 5 second respondent. This Court finds that the Bank is perfectly justified in proceeding against the second respondent/borrower, who has not chosen to challenge the same in any manner. This being the position, the Bank is at liberty to proceed with further steps for getting the physical possession of the property concerned and to have the same sold in the public auction, in accordance with law. The rights and liberties of the petitioner if any, as against the second respondent, are left open. Relief’s sought for in the Writ Petition are not correct or sustainable. Interference is declined and the Writ Petition is dismissed accordingly. Sd/- P.R.RAMACHANDRA MENON JUDGE //True Copy// P.A to Judge ab