IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 26TH OCTOBER 2010 / 4TH KARTHIKA 1932 WP(C).No. 31292 of 2010(J) -------------------------------------- PETITIONER: ------------------- A.SHARAFFUDEEN, VATTAVILA PUTHENVEEDU, VIZHINJAM, THIRUVANANTHAPURAM. BY ADV. SRI.B.KRISHNA MANI. RESPONDENTS: ------------------------ 1. THE AUTHORISED OFFICER, (THE ASSISTANT GENERAL MANAGER), THE FEDERAL BANK LTD., REG. OFFICE, ALWAYE, ERNAKULAM, KERALA – 682 060. 2. THE BRANCH MANAGER, FEDERAL BANK LTD., STATUE BRANCH, THIRUVANANTHAPURAM – 695 001. 3. THE RECOVERY OFFICER, OFFICE OF THE DEBT RECOVERY TRIBUNAL, 8TH FLOOR, K.S.H.B. BUILDING, PANAMPALLY NAGAR, ERNAKULAM-36. 4. PAPPACHAN ALEXANDER, EDAYILAMURI PUTHENVEEDU, ALAMCODE P.O., ATTINGAL, THIRUVANANTHAPURAM – 695 001. 5. THE SECRETARY, TAXES DEPARTMENT, GOVERNMENT OF KERALA, THIRUVANANTHAPURAM – 695 001. R2 BY ADV. SRI.GEORGE VARGHESE (MANACHIRACKEL), S.C, R5 BY GOVT. PLEADER SRI. V.K. SHAMSUDHEEN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 26/10/2010,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: prv. C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).No.31292 of 2010 ------------------------------------------- Dated this the 26th day of October, 2010 J U D G M E N T ---------------------- The petitioner is challenging Ext.P6 notice issued under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), as well as Ext.P8 proceedings through which the sale conducted by the 3rd respondent, the Recovery Officer of the Debts Recovery Tribunal, was confirmed. The petitioner also seeks direction against respondents 1 and 2 to adhere to the alleged 'One Time Settlement' arrived at, in terms of Ext.P5. From Ext.P6 it is evident that the petitioner along with 5 others, who were partners and guarantors, had availed a business loan from respondents 1 and 2 for the firm run under the name and style “M/s.Jubilee Dressers”. It is further revealed that a total amount of Rs.2,61,26,292/- is outstanding payment as on 18.2.2010. Allegation of the petitioner is that by virtue of Ext.P5 a settlement was arrived, but the respondents 1 and 2 are not abiding by terms of the settlement, in permitting the petitioner to pay off the liability. On a perusal of Ext.P5 it is evident that a proposal submitted by the firm was considered and the borrowers were permitted to settle payment by remitting a sum W.P.(C).31292/10-J -2- of Rs.115 lakhs during February and March 2009. It is specifically mentioned that if the amount is not remitted in full before 31.3.2009, interest will run @ 14.75% for the residual amounts. It is also mentioned that the properties of the surety will be released against payment of value of each item as per joint request. It is conceded by the petitioner that pursuant to Ext.P5 compromise, payments were not effected, except payment of a sum of Rs.13 lakhs by sale of one item of property which was already released. It is pertinent to note that the alleged settlement was during March 2009 and the impugned proceedings were pursued on failure to comply with terms of such settlement. As far as the steps initiated under the SARFAESI Act, the petitioner has got remedy as provided under Section 17(1), and the challenge raised before this court, without resorting to such remedy could not be entertained. 2. Ext.P8 confirmation of sale reveals that two items of properties were sold to the 4th respondent in public auction on 19.8.2010, in execution of the recovery certificate obtained by respondents 1 and 2 in O.A.110/06. It is further mentioned that no application under Rules 60, 61 or 62 of the IInd Schedule of Income Tax Act, 1961 was filed for setting aside the sale, and therefore the sale was confirmed in favour of the 4th respondent with effect from 19.8.2010. It is pertinent to note that if the W.P.(C).31292/10-J -3- petitioner has got any case that the sale in question was conduced with any material irregularity, it is left open to the petitioner to challenge the sale by approaching the 3rd respondent by filing any petition as prescribed under the relevant provisions. It is further noticed that against any action taken or order issued by the 3rd respondent the petitioner has got a remedy by way of appeal before the Debts Recovery Tribunal. 3. Learned counsel for the petitioner contended that the notice issued from this court through special messenger to the 4th respondent was returned unserved stating that no such addressee is available. On the above facts it is contended that the sale is effected in the name of a fictitious person and that this court can take judicial notice of the fact and set aside the sale finding that there is material irregularity. It is pertinent to note that there was no such challenge raised by the petitioner in the writ petition. Merely because the notice was returned as unserved, it could not be presumed that the sale was conducted in the name of a fictitious person. It is reported that the sale was conducted for an amount of Rs.70 lakhs and the auction purchaser had deposited the entire amount before the 3rd respondent. Whether the sale was vitiated for want of compliance of any mandatory procedure or vitiated by any material irregularity, are questions which need be considered on W.P.(C).31292/10-J -4- the basis of documents and evidences. Since the petitioner has got effective statutory remedies to challenge the sale in such case, I am not at all impressed to entertain this writ petition to consider veracity of such challenges. Therefor the writ petition is dismissed without prejudice to rights if any available to the petitioner under law to challenge the sale, which is confirmed by virtue of Ext.P8. It s also left open to the petitioner to approach the statutory authority challenging the steps initiated under the Securitisation and Reconstruction of SARFAESI Act as evidenced from Ext.P6. 4. It is submitted by the learned counsel for the petitioner that the petitioner had already approached the Debts Recovery Tribunal in appeal. It is left open to the petitioner to pursue such remedies, if it is sustainable under law. Needless to say that all contentions raised in this writ petition are left open for agitation. C.K.ABDUL REHIM, JUDGE. okb