IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 7TH JUNE 2011 / 17TH JYAISHTA 1933 WP(C).No. 8866 of 2011(G) ------------------------- PETITIONER(S): --------------- N.M.XAVIER, AGED 43, S/O.LATE SRI.N.K.MICHEAL, NADUVILAMULLOTHU HOUSE, LFC ROAD, KALOOR, KOCHI-17, BY ADV. SRI.P.N.RAMAKRISHNAN NAIR SRI.P.VISWANATHAN RESPONDENT(S): --------------- 1. THE SYNDICATE BANK, KALOOR BRANCH, ERNAKULAM, PIN-682 017. 2. THE AUTHORIZED OFFICER, SYNDICATE BANK, KALOOR BRANCH, ERNAKULAM, PIN-682 017. *ADDL. 3RD RESPONDENT 3. P.D.SUNIL KUMAR, S/0.DAMODARAN, PATTARUMADAM, Y.M.J.ROAD, MAMANGALAM, EDAPPALLY, KOCHI – 682 025. IMPLEADED AS PER ORDER DTD.7.4.2011 IN I.A.NO.6373/2011 ADV. SRI.R.S.KALKURA SRI.SHAJI P.CHALY FOR R3 SMT.K.S.SUMITHA FOR R3 SRI.R.SANJITH FOR R3 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07/06/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 8866 of 2011(G) I.A.NO.6373/2011 ALLOWED APPENDIX PETITIONER'S EXHIBITS : EXT.P1 : COPY OF THE NOTICE DTD.19.1.2010 EXT.P2: COPY OF THE LETTER DTD.3.3.2011 EXT.P3: COPY OF THE NOTICE DTD.18.3.2011 RESPONDENT'S EXHIBITS AND ANNEXURES: EXT.R3(A) : PAPER PUBLICATION IN MATHRUBHUMI AND THE NEW INDIAN EXPRESS DAILIES EXT.R3(B) : SALE CERTIFICATE ISSUED IN FAVOUR OF THE 3RD RESPONDENT. ANNEXURE R1(A) : COPY OF THE SALE NOTICE ISSUED TO THE PETITIONER DTD.19.4.2010 ANNEXURE R1(B) : COPY OF THE ACKNOWLEDGMENT CARD ANNEXURE R1(C) : COPY OF THE SALE PROCEEDINGS DTD.3.3.2011 //TRUE COPY// P.A TO JUDGE AB C.K.ABDUL REHIM, J --------------------------------------- W.P(C) No.8866 of 2011-G ---------------------------------------- Dated this the 7th day of June, 2011. J U D G M E N T Petitioner is the owner of the property having an extent of 3.020 cents comprised in survey No.67/10 of Elamkulam Village in Kanayannur Taluk. There is a residential building situated in the said property. The property in question was mortgaged by the petitioner to respondents 1 and 2 for the purpose of securing a loan availed by him to the extent of Rs.7 lakhs. The dispute involved in this writ petition pertains to sale of the said property conducted by respondents 1 and 2 in pursuance of proceedings initiated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), consequent to default committed in repayment of the loan in question. 2. According to the petitioner, apart from Ext.P1 notice, which was issued under Section 13(2) of the SARFAESI Act, he has not received any intimation with W.P(C) No.8866 of 2011-G 2 respect to any further steps of recovery. It is stated that, after receipt of Ext.P1, the petitioner had remitted a sum of Rs.50,000/- in accordance with the instructions of the 2nd respondent. It is further stated that the petitioner had subsequently received a letter as per Ext.P2 intimating that the property was sold in auction and the additional 3rd respondent herein had bid the said property for a sum of Rs.25 lakhs, and that he had already deposited 25% of the bid amount. According to the petitioner the alleged sale was conducted in a collusive manner and the attempt was only to snatch away the property which is having a market value of not less than Rs.30 lakhs, along with a building which will worth about Rs.20 lakhs, for a paltry sum of Rs.25 lakhs. 3. This writ petition was filed when the petitioner had received a notice issued by an Advocate Commissioner, who was appointed by the Chief Judicial Magistrate Court, Ernakulam in a proceedings initiated under Section 14(1) of the SARFAESI Act. According to the petitioner, the sale in W.P(C) No.8866 of 2011-G 3 question is vitiated by irregularities and the same is liable to be set aside. Hence the writ petition is filed seeking to set aside the sale and inter alia seeking direction for permitting the petitioner to repay the entire amounts due in the loan account, in instalments. 4. When the writ petition came up for consideration, this Court granted an interim stay against dispossession of the petitioner from the property, subject to condition of the petitioner remitting a sum of Rs.3 lakhs. Subsequently, the interim stay was extended insisting condition for payment of a further sum of Rs.4 lakhs. When the matter came up for consideration further on 25.5.2011, the petitioner sought permission for effecting payment of the entire balance outstanding in the loan account, which according to him is around Rs.80,000/-. The petitioner was also permitted to make deposit of the said amount, subject to final outcome of this writ petition. It is stated that a total payment of Rs.7,80,000/- has already been effected in compliance with the interim orders. W.P(C) No.8866 of 2011-G 4 5. In the statement filed on behalf of respondents 1 and 2 it is contended that the sale in question was conducted after proper compliance of the mandatory procedure contemplated under the SARFAESI Act. It is stated that the demand under Section 13(2) was issued to the borrowers on 19.1.2010 and further steps were proceeded since there was no response, inspite of receipt of such notice, even after expiry of the statutory period of 60 days. It is further stated that notice under Rule 8(1) of the Security Interest (Enforcement) Rules was also issued to the borrowers. Yet another contention is that the notice of sale was issued to the borrowers in compliance of Rules 8(6) and the same was received by the borrowers including the petitioner, as evident from the postal acknowledgment card, copy of which is produced as Annexure R1(b). It is further stated that the sale was conducted after giving due publication in newspapers. Subsequently, when the petitioner had obstructed to handover possession of the property, respondents 1 and 2 had invoked steps under W.P(C) No.8866 of 2011-G 5 Section 14(1) and the Chief Judicial Magistrate Court was approached. According to respondents 1 and 2 the sale in question was confirmed in favour of the 3rd respondent on 18.3.2011 and the loan now stands closed by adjusting the amount of the sale proceeds received. Under such circumstances, contention of respondents 1 and 2 is that the sale is not vitiated in any manner and the writ petition is not maintainable. 6. In the counter affidavit filed by the 3rd respondent, the facts regarding the procedure followed for conduct of the sale was illustrated more or less on the same facts as contended by respondents 1 and 2. It is stated that the 3rd respondent had deposited a sum of Rs.6,25,000/- being 1/3rd of the bid amount on the date of sale itself and the balance amount of Rs.18,75,000/- was deposited on 18.3.2011. It is further stated that the sale certificate was already issued on 21.3.2011 and the entire procedure has been completed in accordance with the provisions contained in the relevant statute. According to the 3rd respondent there is no tenable W.P(C) No.8866 of 2011-G 6 reason for the petitioner to restrain delivery of possession of the property. 7. Considering the rival contentions as stated above, learned counsel for the petitioner submitted that the allegation regarding acknowledgment of notice as contemplated under Rule 8(6) is not true and correct and the signature in Annexure R1(b) postal acknowledgment is not that of the petitioner. Therefore, receipt of such notice is refuted. However, it is informed that, challenging the sale in question, the petitioner had already approached the Debt Recovery Tribunal invoking Section 17(1) and S.A.No.211/2011 filed in this regard is pending consideration and disposal before the Tribunal. It is further mentioned that the entire dues under the loan account now stands paid by the petitioner. Learned counsel offered that the petitioner is even prepared to make payment of any reasonable compensation/interest with respect to the amount deposited by the 3rd respondent. Since the property in question is the residential house of the petitioner, he is W.P(C) No.8866 of 2011-G 7 making earnest efforts to save the property from being sold. 8. Considering the contentions as stated above, I am of the view that the dispute pertains to validity of the sale, and it is now pending consideration before the statutory authority. Hence, I am of the opinion that there is no necessity for this Court to enter upon any findings regarding validity of the sale or with respect to any relief, which is prayed for in this writ petition. Interest of justice will be served if a direction is issued to the parties to agitate the matter before the Debt Recovery Tribunal. Taking note of the time limits stipulated under Section 17(5) of the SARFAESI Act, it will be desirable for the Tribunal to have an early disposal of the matter. 9. Under the above mentioned circumstances, the writ petition is disposed of directing the Debt Recovery Tribunal, Ernakulam to take all earnest efforts to consider and dispose of S.A.No.211/2011 pending on the files of that Tribunal, after affording reasonable opportunity to all parties concerned, at the earliest possible, at any rate, W.P(C) No.8866 of 2011-G 8 within a period of three months from the date of receipt of a copy of this judgment. 10. Considering the fact that the petitioner is residing in the property in question along with his family and also taking note of the fact that the petitioner had now deposited the entire amount due to the respondent Bank, I am of the view that status quo with respect to possession of the property can be directed to be maintained till the disposal of securitisation application by the Debt Recovery Tribunal. Hence, I order accordingly. Needless to say that the tribunal shall issue necessary directions with respect to appropriation of the amounts already deposited by the petitioner in compliance of the interim orders issued by this court, subject to outcome of the decision of the tribunal. The Writ Petition is disposed of with the above directions. C.K.ABDUL REHIM JUDGE ab