IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR MONDAY, THE 28TH JULY 2008 / 6TH SRAVANA 1930 OP.No. 13530 of 2001(I) ----------------------- PETITIONER: ------------ INDIAN BANK, MAIN ROAD, KOLLAM. REPRESENTED BY ITS ASSISTANT GENERAL MANAGER. BY ADV. SRI.E.SUBRAMANI (SR.) SRI.S.EASWARAN RESPONDENTS: ------------- 1. STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM. 2. THE COMMISSIONER OF LAND REVENUE, THIRUVANANTHAPURAM. 3. THE TAHSILDAR (RR), TALUK OFFICE, KOLLAM. 4. M/S.N.SUNDARESWARAN, SUNDARA BHAVAN, ASRAMAM, KOLLAM, REPRESENTED BY ITS MANAGING PARTNER, SHRI.N.SUNDARESWARAN. 5. SHRI.N.SUNDARESWARAN, M/S.SUNDARESWARAN, SUNDARA BHAVAN, ASRAMAM, KOLLAM. BY ADV. SRI.U.K.RAMAKRISHNAN (SR.) FOR R4 SRI.E.K.MADHAVAN FOR R4 SRI.P.V.LOHITHAKSHAN FOR R4 SRI.V.KRISHNA MENON FOR R4 SMT.P.VIJAYAMMA FOR R4 SMT.SMITHA, GOVERNMENT PLEADER SMT.UMA GOPINATH FOR R5 SRI.V.KRISHNA MENON FOR R5 THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 28/07/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: OP NO.13530/2001 ORDER ON CMP NO.21569/2001 IN OP NO.13530/2001 DISMISSED. 28/07/2008 SD/- (C.N.RAMACHANDRAN NAIR, JUDGE) APPENDIX PETITIONER'S EXHIBITS P1 : COPY OF CLAIM PETITION DATED 26/11/1999 SUBMITTED BY PETITIONER BEFORE R3. P2 : COPY OF ORDER NO.D3-40667/79 DATED 12/10/2000 ISSUED BY R3 ON EXT.P1 CLAIM PETITION. P3 : COPY OF REVISION PETITION DATED 02/11/2000 FILED BY PETITIONER BEFORE THE BOARD OF REVENUE. P4 : COPY OF AFFIDAVIT AND PETITION FOR STAY DATED 02/11/2000 FILED BY PETITIONER ALONG WITH EXT.P4. P5 : COPY OF NOTICE DATED 06/11/2000 UNDER FORM NO.16 ISSUED BY R3. P6 : COPY OF JUDGMENT DATED 13/12/2000 IN OP NO.34243/2000. P7 : COPY OF MEMO DATED 08/02/2001 FILED BY petitioner IN O.A.NO.3/1996. P8 : COPY OF ORDER DATED 08/02/2001 IN O.A.NO.3/1996 OF DEBTS RECOVERY TRIBUNAL. P9 : COPY OF ORDER DATED 27/02/2000 ISSUED BY R2. //TRUE COPY// PA TO JUDGE. jg C.N.RAMACHANDRAN NAIR, J. ------------------------- O.P. No.13530 of 2001 --------------------------------- Dated, this the 28th day of July, 2008 J U D G M E N T The question raised is whether State has priority over the debt due to the Bank for recovery of arrears due from the same defaulter. Learned counsel appearing for the Bank submitted that the value of the property attached in recovery proceedings is such that after selling and settling the liability due to the State, which is above rupees four crores, there will be substantial amount balance available for the Bank. He has also stated that the judgments of this Court in Sherry Jacob Vs. Canara Bank, reported in 2004(3) KLT 1089 and in South Indian Bank Ltd. Vs. State of Kerala, reported in 2006(1) KLT 65, holding that State has priority over the debt due to the Bank, are pending in appeal before the Supreme Court. Learned counsel appearing for the party respondents submitted that the owner of the property is no more. Since property of the defaulter can be proceeded against even after his death, State is free to attach and sell the properties and recover the arrears and balance, if any, is payable to the Bank. If the Bank is confident to recover more than the State debt, then I feel the Bank should settle the dues of the defaulter due to the State by direct payment, then O.P.No.13530/2001 -2- take over the property of the defaulter and sell the same in public auction, so that the Bank will be able to sell the property at market value and recover maximum amount. Therefore, I leave it open to the Bank to pay the arrears due to the State and sell the property in securitisation or other proceedings. It will also be open to the legal heirs of the defaulter to avail amnesty benefit presently available with the State and settle liability, if they so desire. The writ petition is disposed of declaring State's priority over the debt due to the Bank by virtue of the above two decisions. 2. Since the matter is pending for long there will be direction to the recovery authorities to immediately proceed for sale of the property, if the Bank or the defaulters do not clear the liability. If the Bank clears the debt due to the State, the Tahsildar will necessarily lift the attachment and release the property immediately to the Bank. The Bank and the defaulters are given one month time from today to clear the liability, failing which sale will be affected after one month. The property can be immediately notified for sale by the recovery authorities on any date after one month from today and if the Bank does not make payment before that date, the property should be sold in revenue recovery O.P.No.13530/2001 -3- proceedings on the date notified for sale. Sale should be made after due publication and after issuing notice to the Bank and it will be open to the Bank to arrange buyers. Learned Government Pleader will forward a copy of the judgment to the Tahsildar for immediate action. The writ petition is disposed of as above. (C.N.RAMACHANDRAN NAIR, JUDGE) jg