IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON FRIDAY, THE 10TH JULY 2009 / 19TH ASHADHA 1931 WP(C).No. 3546 of 2008(V) ------------------------- PETITIONER(S): --------------- 1. LESLIE PHILIP, S/O. M.P. PHILIP, MALAYIL PUTHENPURACKAL HOUSE, NEDUMPRAYARMUCHI, CHIRAYIRAMBU P.O., PATHANAMTHITTA DISTRICT. 2. VALSA THOMAS, W/O. THOMAS PAUL, KOODATHUMMURIYIL HOUSE, VENNIKULAM P.O., MULLAPPALLY VILLAGE, PATHANAMTHITTA DISTRICT. 3. T.E. VARGHESE, S/O. LATE T.V. EASOW, TEVARVILAYIL HOUSE, KOZHENCHERRY P.O., PATHANAMTHITTA DISTRICT. BY ADV. SRI.P.N.KRISHNANKUTTY ACHAN, SENIOR ADVOCATE SRI.K.MOHANAKANNAN RESPONDENT(S): --------------- 1. M/S. FEDERAL BANK LTD., HEAD OFFICE, ALUVA, REPRESENTED BY ITS CHAIRMAN. 2. THE REGIONAL MANAGER, M/S. FEDERAL BANK LTD., REGIONAL OFFICE, PATHANAMTHITTA. 3. THE MANGER, M/S. FEDERAL BANK LTD., ARATTUPUZHA BRANCH, PATHANAMTHITTA DISTRICT. ADDL.R4. JOHN NINAN, S/O.LATE NINAN, VALLOPPALLIL AIKARETH PUTHENVEETIL, MOHANVILLA, ARATTUPUZHA MURI, ARATTUPUZHA (P.O) ARANMULA VILLAGE, KOZHENCHERRY TALUK, PATHANAMTHITTA DISTRICT NOW RESIDING AT VALLOPPALLIL BUILDINGS, KURUCHIMATTOM (P.O.) MEZHUVELI, KOZHENCHERRY TALUK. ADDL.R5 SUSAMMA NINAN, W/O.LATE NINAN, VALLOPPILLIL AIKARETH PUTHENVEETIL, MOHANVILLA, ARATTUPUZHA MURI, ARATTUPUZHA (P.O) ARANMULA VILLAGE, KOZHENCHERRY TALUK, PATHANAMTHITTA DISTRICT NOW RESIDING AT VALLOPPALLIL BUILDINGS, KURUCHIMATTOM (P.O.) MEZHUVELI, KOZHENCHERRY TALUK. (IMPLEADED AS PER ORDER DATED 14/2/2008 IN I.A.NO.2084/08) ADDL.R6 MRS.ROSHINI JOHN, W/O.JOHN NINAN, VALLOPPILLIL AIKARETH PUTHENVEETIL, MOHANVILLA, ARATTUPUZHA MURI, ARATTUPUZHA (P.O) ARANMULA VILLAGE, KOZHENCHERRY TALUK, PATHANAMTHITTA DISTRICT NOW RESIDING AT VALLOPPALLIL BUILDINGS, KURUCHIMATTOM (P.O.) MEZHUVELI, KOZHENCHERRY TALUK. (IMPLEADED AS PER ORDER DATED 17/9/2008 IN I.A.NO.11659/08) ADV. SRI.MOHAN JACOB GEORGE FOR R2 SMT.P.V.PARVATHI FOR R2 SMT.REENA THOMAS FOR R2 SRI.L.RAM MOHAN FOR R2 SRI.R.SANTHOSH BABU FOR ADDL.R6 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 10/07/2009, THIS COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R.RAMACHANDRA MENON, J. ----------------------------------------------- WP(C) NO. 3546 OF 2008 ----------------------------------- Dated this the 10th day of July, 2009 J U D G M E N T The petitioners are the purchasers of property covered by Ext.P1 to P3 sale deeds for valuable sale consideration and they were enjoying the same. But it was later revealed that, the vendors of the properties had actually created equitable mortgage over the same by depositing the title deeds, in connection with a loan availed from the respondent Bank; which in fact was not revealed to the petitioner at any point of time. When the original borrower did not honour his commitment and turned to be a defaulter, there was no other alternative for the respondent Bank than to proceed against the asset after declaring the account as NPA, invoking the coercive steps under the SARFEASI Act. It was at that point of time, that the petitioners were taken to a shock, who in turn have approached this Court challenging the above proceedings. 2. When the matter was admitted on 04.02.2008, this Court had passed an interim order, intercepting the coercive proceedings; subject to the condition that the petitioners deposited a sum of Rs.24,30,800/- on or before 28.02.2008. Subsequently, the vendors of the properties covered WPC NO.3546/2008 2 by Ext.P1 to P3 were also impleaded as additional respondents pursuant to the order passed by this Court in I.A. 2084/2008. It is also revealed from the proceedings that the service of notice to the additional respondents 4 to 6 could be completed only by effecting 'paper publication'. Despite the completion of service as above, they have not turned up. 3. The learned counsel for the petitioners submits that, the entire liability towards the Bank from the original defaulters stands satisfied by the petitioners, in their attempt to save the properties in question; which position is rather conceded from the part of the respondent Bank as well. As such, the remaining question is as to the releasing of the title deeds deposited with the Bank while creating the security interest over the properties in question. Learned counsel appearing for the Bank submits that, the title deeds could not be returned to the petitioners for the reason that the security interest was created by the borrower and the sureties concerned and not by the petitioners. But since the properties were sold to the petitioners for valuable sale consideration as per Ext.P1 to P3 title deeds and further since the entire liability of the borrower/guarantors to the respondent Bank has been satisfied by the petitioners themselves and above all since the said borrower/guarantors, despite having been impleaded in the party array as the additional respondents 4 to 6 and duly WPC NO.3546/2008 3 served, have not chosen to appear or contest before the Court, it is declared that the additional respondents 4 to 6 do not have any right and interest over the property in question and that all the relevant documents including the original of title deeds and such other records deposited with the respondent Bank in connection with the loan transaction are liable to be returned to the petitioners. 4. In the above circumstances, the respondent Bank is directed to return the title deeds and other connected records pertaining to the loan transaction to the petitioners, as expeditiously as possible, at any rate, within two weeks from the date of receipt of a copy of this judgment. The petitioners will produce a copy of this judgment before the 3rd respondent subscribing the signature to the concerned register/records as to the receipt of the title deeds, either by themselves or through their power of attorney holder specifically authorised in this regard. The Writ Petition is disposed of accordingly. P.R.RAMACHANDRA MENON JUDGE dnc