IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM THURSDAY, THE 23RD SEPTEMBER 2010 / 1ST ASWINA 1932 WP(C).No. 25698 of 2010(J) ----------------------------------- PETITIONER(S): ----------------------- JOY THOMAS, AGED 50, S/O. THOMAS, PUTHUR HOUSE, THOLUR VILLAGE, PARAPPUR DESOM, THRISSUR TALUK. BY ADV. SRI. G.SREEKUMAR (CHELUR) SRI. K.RAVI (PARIYARATH) RESPONDENT(S): ------------------------ 1. THE STATE BANK OF INDIA, REP. BY ITS BRANCH MANAGER, THRISSUR TOWN BRANCH, POOMA COMPLEX, M.G.ROAD, THRISSUR-680 001. 2. THE AUTHORISED OFFICER, ASSISTANT GENERAL MANAGER, R A S M E C C C, 2ND FLOOR, MAHESWARI BUILDING, M.G.ROAD, THRISSUR-1. 3. C.O.SUNNY, S/O. OUSEPH, CHALISSERY HOUSE, ARANATTUKARA P.O., THRISSUR-680 618. 4. LINDA, W/O. C.O.SUNNY, CHALISSERY HOUSE, ARANATTUKARA P.O., THRISSUR-680 618. BY ADV. SRI. SURENDRANATH, SC. R3 BY ADVS. SRI. N.NANDAKUMARA MENON, SENIOR ADVOCATE SRI. P.K.MANOJ KUMAR R1 BY ADV. SRI. P.V.SURENDRANATH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23/09/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 25698 of 2010(J) ----------------------------------- APPENDIX PETITIONER'S EXHIBITS: EXT. P1 : COPY OF THE DECREE IN O.S. NO. 257/01 DT. 04.12.03 ON THE FILE OF THE PRL. SUB COURT, THRISSUR EXT. P2 : COPY OF THE NOTICE SERVED ON THE 3RD RESPONDENT DT. 03.11.09 EXT. P3 : COPY OF THE FINAL ORDER PASSED IN O.A. NO. 178/05 DT. 21.03.07 ON THE FILE OF THE DRT, ERNAKULAM. EXT. P4 : COPY OF THE NOTICE OF DEMAND ISSUED TO THE CERTIFICATE DEBTOR BY THE DRT, ERNAKULAM, DT. 18.04.07 TRUE COPY PA TO JUDGE SMT C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).No.25698 of 2010 ------------------------------------------- Dated this the 23rd day of September, 2010 J U D G M E N T ---------------------- Petitioner is the plaintiff in O.S.257/01, which was filed against the 3rd respondent for recovery of money. The suit was decreed on 4.12.2003 permitting the petitioner to realise a sum of Rs.5,34,433/- with cost. E.P.No.41/07 was filed to execute the decree, in which property having an extent of 5 cents situated in Sy. No:34/1 of Aranattukara Village belonging to the 3rd respondent was attached and put for sale. The execution court permitted the petitioner to participate in the sale and it is stated that the sale was finalised in favour of him and it is posted for confirmation. In the meanwhile the petitioner came to know that the property was actually mortgaged by the 3rd respondent, in favour of 1st respondent Bank for securing a loan availed by him. Consequent to default committed by the 3rd respondent, respondents 1 and 2 had initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). It is also stated that the respondents 1 and 2 had obtained an order (Recovery Certificate) in O.A.178/05 filed before the Debts Recovery Tribunal, Ernakulam. W.P.(C).25698/10-J -2- 2. The recovery officer attached to the DRT had initiated steps for executing the recovery certificate and Ext.P4 notice was issued intimating the steps taken against the property. According to the petitioner, he came to know about the recovery proceedings only at a later stage and the petitioner wants to save the property from being sold in pursuance to the action initiated by the recovery officer. 3. In a counter affidavit filed on behalf of the 1st respondent it is categorically mentioned that the 3rd respondent had created an equitable mortgage with respect to the property, for securing the loan availed by him, as early as in the year 1998. The title deed of the property was pledged with Bank by the 3rd respondent and his wife. It is stated that the DRT had issued the Recovery Certificate as early as early as on 21.3.2007. It is contended that the alleged sale for execution of the civil decree was only on 3.5.2010, which is long after the mortgage created and after the recovery certificate was issued by the Tribunal. It is also pointed out that the sale in question was even after issuance of Ext.P4 notice by Recovery Officer. Hence the contention is that, the Bank has got first charge over the secured property and any charge created subsequent to the mortgage could not have any overriding effect. Therefore the claim of the petitioner is not sustainable, is the contention. W.P.(C).25698/10-J -3- 4. It is conceded by the petitioner that the respondent Bank has got prior charge over the property by virtue of equitable mortgage created. Limited prayer of the petitioner is only to permit to liquidate the liability due to respondents 1 and 2, in order to save the property from being sold. It is submitted that the petitioner is ready and willing to pay off the entire liability due to the respondents 1 and 2, within a reasonable time in instalments. 5. Learned counsel appearing for respondents 1 and 2 submitted that the petitioner is a total stranger as far as the loan transaction is concerned and that he has no such right to claim redemption of the mortgage on any ground. It is also contended that even though the sale was conducted by the civil court, it will not be having any overriding effect on the proceedings for sale initiated under the provisions of the Recovery Debts due to Banks and Financial Institutions Act, 1993. 6. Having considered the facts and circumstances, I am of the opinion that the petitioner could not make any successful challenge against the proceedings now pending, before the Recovery Officer. However, if the petitioner is ready and willing to liquidate the entire liability, I find no reason as to why such indulgence could not be shown for facilitating the petitioner to save the property from being sold, considering the fact that he W.P.(C).25698/10-J -4- has already bid in auction the property for valuable consideration. 7. In the result, the writ petition is disposed of directing the respondents 1 and 2 to keep in abeyance further proceedings against the property in question, pursuant to Ext.P4 notice, subject to condition of the petitioner remitting the entire amount due under the loan account within a period of 4 (four) months, in instalments. The petitioner shall make payment of the entire liability in 4 equal monthly instalments falling due on or before 15.10.2010 and on or before the 15th day of the succeeding months. 8. It is made clear that on the event of default in payment of any one of the instalments, the respondents will be free to proceed with further steps pursuant to Ext.P4 notice. It is also made clear that the benefit granted as above is subject to the condition that the petitioner is precluded from raising any subsequent challenge against such proceedings. It is also clarified that in case of any default in compliance, the benefit of confirmation of sale if any issued by the executing court will not be available to the petitioner. C.K.ABDUL REHIM, JUDGE. okb