IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN THURSDAY, THE 21ST OCTOBER 2010 / 29TH ASWINA 1932 WA.No. 619 of 2010() -------------------- AGAINST THE JUDGEMENT IN WPC.33294/2009 Dated 02/02/2010 .................... APPELLANTS/PETITIONERS: ------------------------ 1. SHIHAB, AGED 29 YEARS,S/O.KUNHU MUHAMMED PROPRIETOR, COCHIN BAKERY, BUILDING NO.E.P.NO.VII/42B,OF EZHUPUNNA PANCHAYATH CHERTHALA, RESIDING AT RAHMATH MANZIL, AROOR MURI, CHERTHALA, ALAPPUZHA. 2. NISHAD,AGED 43 YEARS, S/O.KUNHU MUHAMMED PROPRIETOR, VELLEZHATH TRADERS, BUIDLING NO.E.P.NO.VII/42C, OF EZHUPUNNA PANCHAYATH CERTHALA, RESIDING AT VELLEZHATHU, NADUVTH NAGAR P.O. CHERTHALA. BY ADV. SRI.B.PRAMOD RESPONDENTS/RESPONDENTS -------------------------- 1. THE AUTHORISED OFFICER UCO BANK, WELLINGTON ISLAND,KOCHI. 2. UCO BANK, WELLINGTON ISLAND BRANCH, KOCHI REPRESENTED BY ITS MANAGER. 3. K.T.UNNIKRISHNAN, KUNCHENVELIYIL, ERAMALLOOR P.O.,CHERTHALA. 4. ASHLEY NAIR, ADVOCATE, ALAPPUZHA BAR ASSOCIATION, DISTRICT COURT, ALAPPUZHA. ADV. SRI.GEORGE MATHEWS FOR R4 SRI.GEORGE SEBASTIAN FOR R3 SRI.GEORGE KARITHANAM VARGHESE,SC,UCO B FOR R1 &2 THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 21/10/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & K.SURENDRA MOHAN, JJ. .................................................................... Writ Appeal No.619 of 2010 .................................................................... Dated this the 21st day of October, 2010. JUDGMENT Ramachandran Nair, J. The appellants, tenants in a mortgaged building, are challenging securitisation proceedings initiated by UCO Bank for recovery of loan availed by a person for whom the building owner stood as surety. The property taken on lease by the appellants is the property mortgaged by third respondent to the Bank. We do not think the Bank's mortgage right can be defeated by the mortgagor engaging tenants in the building. It is common knowledge that tenanted building cannot be sold at market value or the value that could be obtained on sale of a tenanted building will be much lower the market value it would fetch if sold without tenants. On equitable considerations the relief that we could extend to the appellants is to allow them to clear the arrears due to the Bank and purchase the building. Since sale could not take place, the Bank would after notice to the building owner offer to sell the property to the appellants for the debt amount and if appellants remit 2 the amount, the property should be sold to the appellants after notice to the building owner and giving an opportunity to him to find another buyer or to discharge the debt or purchase the property by himself on clearing the arrears. The appellants are given one month's time to approach the Bank for purchase of the property and if substantial amount is paid, then the Bank should give reasonable time for them to raise balance amount to purchase the property. If the appellants do not make any concrete proposal, then the appellants shall give the building free of possession to the Bank on expiry of thirty days from today. Writ Appeal is disposed of as above. C.N.RAMACHANDRAN NAIR Judge K.SURENDRA MOHAN Judge pms