IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 8TH DECEMBER 2010 / 17TH AGRAHAYANA 1932 WP(C).No. 26817 of 2010(B) --------------------------------------- PETITIONER: ------------------- SMT.ZORA, AGED 40 W/O.A.K.PUTHU, MAJERPALLA, VORKADY,KASARAGOD. BY ADV. SMT.R.PADMAKUMARI. RESPONDENTS: ------------------------ 1. THE KERALA FINANCIAL CORPORATION, REPRESENTED BY CHIEF MANAGER, KASARAGOD, PIN – 671 323. 2. DISTRICT COLLECTOR, KASARAGOD, PIN – 671 323. 3. ISMAIL K.P, AGED 83, S/O.QUTHABHA, KALLUR HOUSE, VORKADY P.O, MANJESHWAR, KASARAGOD. R1 BY ADV. SRI.R.S.KALKURA, S.C, R2 BY GOVT. PLEADER SRI. BIJOY CHANDRAN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08/12/2010,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: prv. C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).No.26817 of 2010 ------------------------------------------- Dated this the 8th day of December, 2010 J U D G M E N T ---------------------- The petitioner claims to be a bonafide purchaser of 13 cents of property comprised in R.Sy. No.498/F and 498/4D in Vorkady Panchayath. It is stated that, after purchase of the property the petitioner had constructed a residential building therein and she is residing with her family in the said building. Subsequently it is brought to the notice of the petitioner that the 3rd respondent had availed two vehicle loans from the 1st respondent Corporation and for securing the said loan the property in question was mortgaged with the 1st respondent Corporation. It is further learnt that the 3rd respondent only sold the property to one Sri.B.K. Hassan Kunhi, from whom the petitioner had purchased the property in question. Consequent to default committed in repayment of loans availed by the 3rd respondent, the 1st respondent had initiated coercive steps of recovery by invoking the provisions contained in the Kerala W.P.(C).26817/10-B -2- Revenue Recovery Act, 1968. Even though the petitioner had approached respondents 1 and 2 narrating the above facts, coercive steps of recovery has been pursued. Under such circumstances the petitioner submitted Ext.P2 application before the Legal Service Authority expressing willingness to repay the loan amount in instalments. But, respondents 1 and 2 are still threatening with coercive steps for attachment and sale of the property. Hence the petitioner seeks appropriate direction to restrain the coercive steps and to direct the 1st respondent to permit the petitioner to pay off the entire liability in instalments. 2. In a statement filed on behalf of the 1st respondent it is mentioned that the 3rd respondent had availed two loans from the 1st respondent during the year 1996-'99 by hypothecating the property in question, which belonged to the daughter of the 3rd respondent. It is also mentioned that the vehicles in question were acquired possession consequent to default committed in repayment and the vehicles were sold and the proceeds thereof was adjusted against arrears in the loan account. But since the arrears were not wiped off, recovery steps were initiated against the property in question. It is specifically stated that the 1st respondent had permitted 'One Time Settlement' on the basis of W.P.(C).26817/10-B -3- request made by the 3rd respondent, to pay off the entire liability at Rs.13.50 lakhs, on or before 30.6.2010. But 3rd respondent had failed to avail such benefits. It is further stated that the balance outstanding payment as on 1.8.2010 is about Rs.23.92 lakhs. The 1st respondent had also produced copies of statement of accounts as per Ext.R1(a) and R1(b). However, the petitioner is refuting correctness of the balance amount. 3. From the facts stated above it is clear that the petitioner is not a party to the loan transaction. Even though the property in question was purchased by the petitioner through a proper sale deed executed, the property was under mortgage prior to such transaction. Therefore it could not be held that the mortgage created by the 3rd respondent will become invalid in any manner due to the subsequent transactions. The petitioner could not validly raise any challenge against the recovery steps initiated by respondents 1 & 2, since it is evident that at the time when the mortgage was created the petitioner was not holding any interest in the property. Merely because the petitioner is a bonafide purchaser for valuable consideration, the rights of the 1st respondent on the basis of the mortgage created could not be curtailed in any manner. W.P.(C).26817/10-B -4- 4. However, in view of the submissions made by the petitioner that she is ready and willing to make payment of the amounts due, this court was pleased to grant an interim order on 20.8.2010 imposing a condition for remitting a sum of Rs.50,000/-. Subsequently, by virtue of another order dated 30.9.2010, the petitioner was directed to make payment of a further sum of Rs.3 lakhs. It is now reported that a total amount of Rs.3,50,000/- was paid pursuant to such directions. Under such circumstances I am of the view that some indulgence can be shown in permitting the petitioner to settle the account with a view to save the property from being sold. 5. It is brought to my notice through the statement filed on behalf of the 1st respondent that the 3rd respondent was allowed with 'One Time Settlement' facility to pay off the entire liability at Rs.13.50 lakhs, on or before 30.6.2010. I do not find any reason as to why the same benefit cannot be extended with respect to the petitioner also, who has now come forward to settle the arrears on behalf of the 3rd, of course, by paying belated interest from the date stipulated for settlement of the account. Under such circumstances, I am of the view that the petitioner can be relegated to the 1st respondent to seek W.P.(C).26817/10-B -5- settlement of the account in view of the 'One Time Settlement' facility already allowed to the 3rd respondent. 6. Under the above circumstances the writ petition is disposed of directing the petitioner to make a representation before the 1st respondent to permit payment of the balance amount out of Rs.13.50 lakhs, which is the amount fixed under the 'OTS' allowed to the 3rd respondent, along with interest due on the basis of belated payment. If any such representation is received from the petitioner within a period of two weeks from the date of receipt of a copy of this Judgment, the 1st respondent shall consider the same and take appropriate decision thereof. 7. Needless to say that if the petitioner is allowed to remit the balance amount in accordance with such request, sufficient time shall be given for discharging the liability. 8. It is further made clear that all coercive steps of recovery against the property in question shall be kept in abeyance till the 1st respondent takes a decision in accordance with the directions contained herein above. C.K.ABDUL REHIM, JUDGE. okb