IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM MONDAY, THE 19TH OCTOBER 2009 / 27TH ASWINA 1931 WP(C).No. 7581 of 2007(C) ------------------------- PETITIONER(S): --------------- V.K.RAMAN NAMBOOTHIRI, KARIPPATH, SREE NILAYAM, VALAMBOOR P.O., PERINTHALMANNA. BY ADV. SRI.M.SREEKUMAR RESPONDENT(S): --------------- 1. SOUTH INDIAN BANK LTD., REPRESENTED BY CHIEF MANAGER, K.U.D.F.C.BUILDING, CHAKKORATHUKULAM, PUTHIYA NIRATHU, WEST HILL, KOZHIKODE. 2. THE CHIEF MANAGER (AUTHORISED OFFICER), SOUTH INDIAN BANK LIMITED, K.U.D.F.C.BUILDING, CHAKKORATHUKULAM, PUTHIYA NIRATHU, WEST HILL, KOZHIKODE. 3. THE MANAGER,SOUTH INDIAN BANK LIMITED, PERINTHALMANNA BRANCH, PERINTHALMANNA. 4. M/S.VALLUVANAD KHADI & VILLAGE INDUSTRIES DEVELOPMENT CO-OPERATIVE SOCIETY LTD., REPRESENTED BY ITS PRESIDENT, M.PRABHAKARAN, MAVULLY HOUSE, ANGADIPURAM, VALAMBOOR P.O., PERINTHALMANNA. 5. SRI.M.PRABHAKARAN (PRESIDENT), MAVULLY HOUSE, ANGADIPURAM, VALAMBOOR P.O., PERINTHALMANNA. 6. M.RAMANI (DIRECTOR), MAVULLY HOUSE, ANGADIPURAM, VALAMBOOR P.O., PERINTHALMANNA. ADV. SRI.A.KUMAR FOR R1 TO 3 SRI.DEVIDAS.U.K FOR R4 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 19/10/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).7581/07 APPENDIX PETITIONER'S EXHIBITS:- EXT.P1:- TRUE COPY OF THE LETTER DT.6.5.2005 ISSUED TO THE R3. EXT.P2:- TRUE COPY OF THE NOTICE REF.NO:CLT/RO/SEC/64/06-07 DT.19.1.2007 EXT.P3:- TRUE COPY OF THE REPRESENTATION FILED BEFORE THE R2 DT.20.2.2007 EXT.P4:- TRUE COPY OF THE PHOTOGRAPH SHOWING THE BOARD EXT.P5:- TRUE COPY OF THE POSSESSION NOTICE DT.9.6.2009 RESPONDENT'S EXHIBITS:- NIL OKB //TRUE COPY// P.A. TO JUDGE C.K.ABDUL REHIM, J. ------------------------------ W.P.(C).No.7581 OF 2007 ------------------------------ Dated this the 19th day of October, 2009 J U D G M E N T ---------------------- 1. Petitioner is one of the guarantors with respect to a loan availed by the 4th respondent co-operative Society, from the 3rd respondent Bank. Respondents 5 and 6 are the President and Director respectively, of the 4th respondent, whose properties are also mortgaged for securing the loan. Pursuant to default committed in repayment of the loan amounts, respondents 1 to 3 initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), and the properties belonging to the petitioner as well as respondents 5 and 6 were proceeded against. Ext.P2 notice was issued under Section 13(2) wherein 5 items of property, including 2 items belonging to the petitioner, were mentioned as secured assets. According to the petitioner the assets belonging to the Society which is shown as 'E' schedule in Ext.P2 notice itself will worth more than Rs. 20 lakhs. The properties belonging to the President and Director of the Society (Respondents 5 and 6) will fetch another sum of Rs.20 lakhs. The total arrears due to the Bank is only Rs.17 W.P.(C).7581/07-C 2 lakhs. Therefore, contention of the petitioner is that the amount can be recovered by proceeding against the assets of the Society as well as the mortgaged properties belonging to the President and the Director. Hence the petitioner is seeking direction for restraining the defendant from proceeding against his properties, till sale is effected with respect to the properties of the Society and the properties of respondents 5 and 6. 2. When the matter came up for consideration on 14.3.2007 this court granted an interim order restraining sale of the properties belonging to the petitioner and permitting the Bank to proceed against the properties of respondent 5 and 6. It is reported that thereafter one item of property belonging to the 5th respondent was sold for an amount of Rs.5.5 lakhs. Learned standing counsel appearing for respondents 1 to 3 submitted that after crediting the sale proceedings the balance outstanding at present is about Rs.17.5 lakhs. 3. Grievance of the petitioner at present is that the Bank is not taking effective steps to sell other properties belonging to respondents 5 and 6. On the other hand the Bank is threatening with sale of the properties belonging to the petitioner. According to him, one item of property belonging to the 5th respondent was put to auction recently, but the sale was adjourned without assigning any particular reason. It is W.P.(C).7581/07-C 3 submitted that the petitioner can arrange buyers who are interested in purchasing the said property and if the Bank publishes sale of that particular item of property ('D' Schedule mentioned in Ext.P2) such buyers can participate in the auction. It is also pointed out that as per the provisions contained in the Rule 8 of the SARFAESI (enforcement) Rules, 2002, private sale can also be permitted with respect to sale of the said property. 4. It is an admitted fact that the petitioner is a guarantor to the loan transaction. The contention of the petitioner that the properties belonging to other guarantors shall proceed first before proceeding against properties of the petitioner, is not at all sustainable in view of the specific provisions contained in the SARFAESI Act. 5. However, it is admitted that pursuant to the interim order of this court, the property mentioned as 'D' Schedule in Ext.P2 notice was put to sale by the Bank. Therefore the Bank can be directed to proclaim sale of the said property once again before proceeding with steps against properties of the petitioner. The petitioner may arrange buyers as submitted, for purchasing the said property and can attempt to save the property belonging to him. But the petitioner cannot be granted with any relief as prayed for restraining the proceedings against his properties, if W.P.(C).7581/07-C 4 no sale could be effected and if the sale proceeds are not enough to wipe off the liability. The writ petition is disposed of with the above said observations. C.K.ABDUL REHIM, JUDGE. okb