IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR TUESDAY, THE 16TH JUNE 2009 / 26TH JYAISHTA 1931 WP(C).No. 20549 of 2004(U) -------------------------- PETITIONER(S): --------------- LAILA BEEVI, AGED 44, W/O ZIRAJUDDIN, VALEEL VADEKETHIL THAJ MANSION, KANNAMBILLY, KAYALMKULAM, KOLLAM DISTRICT, SOLE PROPRIETRESS OF M/S. THEJUS AUDITORIUM, CHEPPAD, KAREELAKULANGARA P.O. BY ADV. SRI.SHAJI CHIRAYATH SMT.JIJI M. VARKEY RESPONDENT(S): --------------- 1. KERALA FINANCIAL CORPORATION, VELLAYAMBALAM THIRUVANANTHAPURAM, REPRESENTED BY ITS MANAGING DIRECTOR. 2. THE BRANCH MANAGER, KERALA FINANCIAL CORPORATION, BRANCH OFFICE, KUMARANASAN SMARAKA MANDIRAM, COURT ROAD, ALAPPUZHA 688 001 3. K.P.PRAMEELA, AGED 38, W/O. VIJAYAKUMARAN NAIR, PULIMOOTIL TEJUS CHEPPAD, KAREELAKULANGARA P.O., KALAYKULAM, PIN 690 572. 4. K.VIJAYAKUMARAN NAIR, AGED 49, S/O.KUNJANPILLAI NAIR, PULIMOOTTIL TEJUS, CHEPPAD, KAREELAKULANGARA P.O., KALAYKULAM, PIN 690 572. ADV. SRI.T.S.RAJAN FOR R3 SRI.V.B.UNNIRAJ, SC, KFC FOR R1 & 2 SRI.S.SREEKUMAR,SC,KERALA FINANCIAL COR FOR R1 & 2 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 16/06/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 2 APPENDIX PETITIONER'S EXHIBITS: EXT.P1 TRUE COPY OF THE SALE DEED NO. 78 OF 2004 PERTAINING TO PURCHASE OF THEJUS AUDITORIUM FROM RESPONDENTS 3 AND 4 BY THE PETITIONER DATED 9.1.2004 EXT.P2 TRUE COPY OF THE LETTER ISSUED BY THE 2ND RESPONDENT BRANCH MANAGER, REGARDING SANCTION OF ONE TIME SETTLEMENT FACILITY DATED 4.2.2004 EXT.P3 TRUE COPY OF THE PAYMENT MADE BY THE PETITIONER PURSUANT TO EXT.P2 AS PER CASH RECEIPT NO. 002560 OF RS. 6,00,000/- DATED 31.3.2004 EXT.P4 TRUE COPY OF THE APPLICATION DATED 31.3.2004 SUBMITTED BY THE PETITIONER TO TRANSFER THE LIABILITY TO HER BEFORE THE 2ND RESPONDENT BRANCH MANAGER. EXT.P5 TRUE COPY OF THE ORDER DATED 4.5.2004 ISSUED BY THE 2ND RESPONDENT TO CANCEL EXT.P2 AND REVIVE LOAN ACCOUNT OF M/S. THEJUS AUDITORIUM. EXT.P6 TRUE COPY OF THE NOTICE DATED 8.6.2004 ISSUED UNDER SECTION 29 OF THE STATE FINANCIAL CORPORATION ACT BY THE 2ND RESPONDENT BRANCH MANAGER TO THE PETITIONER. RESPONDENTS' EXHIBITS: NIL. TRUE COPY P.S. TO JUDGE. C.N. RAMACHANDRAN NAIR, J. -------------------------------------------- W.P.C. NO. 20549 OF 2004 -------------------------------------------- Dated this the 16th day of June, 2009 C.R. JUDGMENT Petitioner is the purchaser of property mortgaged by the third respondent to KFC for availing a loan. Under a sale deed, Ext.P1 dated 9.1.2004 the third respondent sold the property to the petitioner. Corporation thereafter granted OTS benefit to the original borrower on 4.2.2004 allowing settlement of full liability on payment of Rs. 46 lakhs before 28.2.2004. It is seen from Ext.P1 that there is no concealment of liability due to KFC by the seller when property was sold to the petitioner. On the other hand, an amount of Rs. 53,79,500/- was reserved for the purchaser for payment to KFC. In other words, sale was subject to charge in favour of KFC. Counsel appearing for the KFC submitted that since payment was not made in terms of OTS Scheme, benefit was cancelled on 4.5.2004 vide Ext.P5. However, this Court vide two interim orders dated 27.3.2004 and 5.8.2004 granted stay on payment of Rs. 23 lakhs each. In other words, within five 2 months from the last date fixed for payment by the KFC under OTS scheme, entire OTS amount was paid. Therefore question now to be considered is whether KFC can decline OTS benefit to the petitioner. In the first place I do not find anything illegal or irregular in the borrower selling the mortgaged property to settle liability even under the OTS scheme. Counsel for the KFC submitted that the amount reserved in the sale deed should be paid to KFC because that is the liability undertaken to be discharged by the purchaser. I do not think this contention is tenable because sale deed binds the parties and KFC cannot claim benefit of higher price realised by the petitioner over the debt amount. In fact since OTS benefit was granted after execution of sale deed, liability reserved in the sale deed gets reduced so that differential amount will be payable by the petitioner to the third respondent. However KFC is entitled to interest for the belated payment of OTS amount. Considering the sacrifices made by KFC while granting OTS benefit,which is substantial amount, and time for payment was essence of settlement, I direct the petitioner to pay interest at 15% per annum for the belated payment of OTS amount. 3 KFC will give a detailed statement of interest liability for delayed payment of OTS amount after reckoning payments made within two weeks from the date of production of a copy of this judgment. Petitioner is granted three weeks' time thereafter to make payment and on payment, KFC will release title deeds to the petitioner. (C.N. RAMACHANDRAN NAIR) Judge kk 4