IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM THURSDAY, THE 30TH SEPTEMBER 2010 / 8TH ASWINA 1932 WP(C).No. 13462 of 2010(G) -------------------------- PETITIONER(S): --------------- 1. P.H.KHALID, AGED 50 YEARS, S/O. LATE HASSAN,THEVANCHERRYPARAMBIL, PALLURUTHY.P.O., KOCHI-6. 2. N.H.SANUDHEEN, AGED 40 YEARS, S/O. LATE HASSAN,THEVANCHERRYPARAMBIL, PALLURUTHY.P.O., KOCHI-6. BY ADV. SRI.ESM.KABEER RESPONDENT(S): --------------- 1. V.J.SHIMMY JOSEPH, MYLATHARA HOUSE, NEAR CULTES CENTRE, PERUMPADAPPU, PALLURUTHY.P.O. KOCHI-6. 2. PAULSON JOSEPH, XV/387 A, VATTAMAKKAL HOUSE, MOOLANKUZHY, THOPPUMPADY.P.O. KOCHI. 3. SANTHAMMA JOSEPH, W/O. JOSEPH, VATTAMAKKAL HOUSE, MOOLANKUZHY, THOPPUMPADY.P.O. KOCHI. 4. THE MANAGER, STATE BANK OF TRAVANCORE, KUMBALANGI BRANCH, KUMBALANGI.P.O. 5. CHIEF MANAGER, (ADVANCES), STATE BANK OF TRAVANCORE, REGION-1, ZONAL OFFICE, PANAPILLY NAGAR, KOCHI-36. ADV. SRI.SATHISH NINAN FOR R4-5 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 30/09/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K. ABDUL REHIM, J ------------------------------ WP(C) NO. 13462 OF 2010 ------------------------------------ Dated this the 30th day of September, 2010 JUDGMENT Petitioners claim to be bonafide purchasers of 10 cents of property comprised in survey No.293/2/6 of Edakochi village. This Writ Petition is filed challenging the proceedings initiated by the 4th respondent Bank against the said property, under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). They purchased the property by virtue of Ext.P1 registered sale deed, executed in the year 2007. Admittedly the purchase was made from the predecessor in interest of respondents 1 to 3. It is revealed that the vendor, Mr.Joseph has created a mortgage in favour of the 4th respondent Bank, with respect to the property, in order to secure a loan availed by him in the year 2002. It is the case of the petitioners that they came to know 2 WP(C) No. 13462/2010 about the mortgage only from Ext.P14 notice which was published under Section 13 (2) of the SARFAESI Act. Since the Bank proceeded with steps for taking over possession of the property, this Writ Petition is filed. 2. Petitioners raised contentions that Mr.Joseph was not having absolute marketable title at the time when the mortgage was created. However, it is conceded that the petitioner had participated in an Adalath convened by respondents 4 and 5 wherein a settlement was arrived with respect to the closure of loan. It is evident from Ext.P12 that the respondent Bank had agreed to settle the entire liability on payment of an amount of Rs.2,10,000/-, on or before 25.03.2010. But the petitioner failed to make payment in accordance with the settlement arrived. 3. Even assuming that the claim of the petitioners that they purchased the property for valuable consideration is true and correct, it remains undisputed that the mortgage in question was created much prior to the purchase. The 3 WP(C) No. 13462/2010 property in question is the secured asset as far as the creditor Bank is concerned. Petitioners could not be permitted to raise any contention regarding validity of the title of the borrower, since they were not parties to the loan transaction. 4. With respect to challenge against the proceedings under the SARFAESI Act, this Court is not justified in interfering in view of the effective alternate remedy available. It is also pertinent to note that by virtue of Ext.P12, the petitioner had conceded for payment of the liability, probably with a view to save the property from being sold. 5. Under the above circumstances, I find no merit to interfere with the proceedings now initiated under the SARFAESI Act. However, learned counsel for the petitioner made an appeal to this Court for permitting him to pay off the entire liability in terms of Ext.P12 settlement. Learned counsel appearing for respondents 4 and 5, eventhough 4 WP(C) No. 13462/2010 opposes such a prayer, conceded that if this Court is inclined to issue any such directions, the petitioner should be held liable for payment of interest on the settled amount, at the agreed rate under the loan agreement, for the period from 25.03.2010 till the date of payment. 6. In the result, the Writ Petition is disposed of directing the respondents 4 and 5 to keep all further steps of recovery in abeyance provided the petitioner remits the settled amount of Rs.2,10,000/- mentioned in Ext.P12, within a period of three months from today along with interest due thereon at the rate of 12% from 25.03.2010 onwards. 7. If the entire payment is settled as directed above, title deeds relating to the property in question shall be released to the petitioner. This direction is issued considering the fact that the petitioners hold a title over the property as per Ext.P1 from the year 2007 onwards, and also considering the fact that inspite of receipt of notice 5 WP(C) No. 13462/2010 from this Court, the respondents 1 to 3 have not chosen to appear before this Court or contested the Writ Petition. 8. It is made clear that on the event of default in payments of the amounts as stipulated above, the respondents 4 and 5 will be at liberty to proceed with further steps pursuant to Ext.P14 notice and on any such event, the petitioners are precluded from raising any subsequent challenge against such proceedings. 9. It is also made clear that on payment of the amount as directed above, the petitioners will be at liberty to proceed against respondents 1 to 3 for realization of such amount as permissible under law. C.K. ABDUL REHIM JUDGE dnc