IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE B.P.RAY TUESDAY, THE 31ST MAY 2011 / 10TH JYAISHTA 1933 WA.No. 624 of 2011() -------------------- AGAINST THE JUDGEMENT/ORDER IN WPC.3279/2011 Dated 16/02/2011 .................... APPELLANT(S): PETITIONER ------------------------ THAMPIS GROUP OF BUSINESS, THAMPIS ARCADE, ARYASALA, CHALAI, REP. BY ITS PARTNER, V.THAMPI, SHIJU NIVAS, MUKATHALA, THIRUKOVILVATTAM VILLAGE, KOLLAM. BY ADV. SRI.B.KRISHNA MANI SMT.N.V.SANDHYA RESPONDENT(S): /RESPONDENT --------------- AUTHORISED OFFICER AND CHIEF MANAGER, VIJAYA BANK, THIRUVANANTHAPURAM BRANCH, M.G.ROAD, THIRUVANANTHAPURAM, PIN - 695 010. MR.K.ANAND, STANDING COUNSEL THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 31/05/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.A.NO.624/2011 APPENDIX PETITIONER'S EXHIBITS ANNEXURE 1 : COPY OF PROCEEDINGS DATED 24/05/2011 IN C.M.P.NO.3934/2011 BY THE JUDICIAL FIRST CLASS MAGISTRATE, KOLLAM. ANNEXURE II : COPY OF ORDER DATED 24/05/2011 ISSUED BY THE CHIEF JUDICIAL MAGISTRATE, THIRUVANANTHAPURAM. //TRUE COPY// PA TO JUDGE. jg C.N.RAMACHANDRAN NAIR & BHABANI PRASAD RAY, JJ. ---------------------------------- W.A.No.624 of 2011 --------------------------------- Dated, this the 31st day of May, 2011 J U D G M E N T Ramachandran Nair, J. Heard learned counsel for the appellant and learned Standing Counsel for the respondent Bank. 2. The appellant is in arrears of around Rs.6 crores to the respondent Bank. Various fixed assets and stock-in-trade are mortgaged towards security for the loan. Learned Standing Counsel appearing for the Bank gave details of the valuation of various items of properties mortgaged by the appellant. Pursuant to our interim order dated 27/05/2011, the appellant has furnished an affidavit of undertaking seeking 10 months' time to settle the liability. Learned Standing Counsel for the Bank opposed the same stating that the Bank itself gave reasonable time to the appellant and the appellant could not avail the benefit. We are also not inclined to grant W.A.No.624/2011 -2- time to the appellant because going by the extent of liability, the appellant will have to certainly sell some of its assets to settle the liability, which need not take more than two months' time. We are granting this facility only to prevent complete destruction of the appellant in the business. Therefore, it is for the appellant to immediately notify any of the items of properties including the mortgaged properties for sale with the approval of the Bank. We make it clear that the agreement for sale should be executed stating clearly the Bank's liability and with the requirement of the Buyer directly depositing the sale consideration to the loan account of the appellant and only on approval by the Bank, sale deed should be executed by the appellant. The Bank will also hand over documents on sale of any item of the property directly to the Buyer on payment made for such item of property. It is open to the Bank to ascertain whether property sold is on market value and is a genuine sale to approve the sale and receive the consideration W.A.No.624/2011 -3- towards part settlement of the liability and allow the appellant to sell mortgaged properties systematically until full liability is discharged or until any arrangement acceptable to the Bank is made for payment of the balance liability. If the appellant cannot settle or agree to settle liability fully or partly to the satisfaction of the Bank by 31/07/2011, there will be a direction to the appellant to hand over possession of the mortgaged properties to the Bank on 01/08/2011 itself for the Bank to proceed for sale of the properties in continuation of the proceedings already initiated. If the appellant fails to do so, the Bank can approach this Court. There will also be an order of prohibition against the appellant from selling or parting with possession of any of the mortgaged properties including fixtures and furniture except with the approval of the Bank. However the appellant can continue the business without creating any further liability on them. Proceedings pending before the Chief Judicial Magistrates, Kollam and W.A.No.624/2011 -4- Thiruvananthapuram and before the Recovery Officer will remain suspended until 31/07/2011 and thereafter the proceedings will be reopened and continued at the request of the Bank. This Writ Appeal is disposed of as above. (C.N.RAMACHANDRAN NAIR, JUDGE) (BHABANI PRASAD RAY, JUDGE) jg