IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 26108 of 2010(K)
1. MATHEW P.A., AGED 78 YEARS,
... Petitioner
Vs
1. THE DY.TAHSILDAR (RR) OFFICE OF
... Respondent
2. THE KERALA FINANCE CORPORATION,
3. THE BRANCH MANAGER,
4. THE STATE OF KERALA,
5. ANISH THOMAS, AGED 39 YEARS,
For Petitioner :SRI.C.V.MANUVILSAN
For Respondent :GOVERNMENT PLEADER
The Hon'ble MR. Justice C.K.ABDUL REHIM
Dated :08/11/2010
O R D E R
C.K.ABDUL REHIM, J
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W.P(C) No.26108/2010 & 26643/2010
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Dated this the 8th day of November, 2010.
J U D G M E N T
Petitioner in W.P(C) No.26643 of 2010 is the
proprietor of small scale industrial unit, which availed a
loan from the respondent Corporation. The petitioner in
W.P(C) No. 26108 of 2010 is the guarantor with respect to
the said loan transaction, and the property belonging to him
was mortgaged in order to secure the loan. Challenge in
both these writ petitions is against Ext.P2 notice of sale
proclamation, through which steps for sale of the
immovable property was initiated under the provisions of
the Kerala Revenue Recovery Act, and sale of the property
was conducted on 23.7.2010. It is contended that, when the
sale proclamation was published the petitioners have
approached the respondent and requested for providing
some time for payment of the arrears through ‘One Time
Settlement’. But without considering such requests, the
property was sold on 23.7.2010 for an amount of `13.20
W.P(C) No.26108/2010 & 26643/2010 2
lakhs. According to the petitioner the property in question
is worth more than `62.50 lakhs and the sale was conducted
for too meager an amount. The petitioners have sought
stay of all further proceedings for confirmation and
issuance of sale certificate.
2. On 20.9.2010 when the writ petition came up for
consideration, this Court issued an interim order to
maintain status quo and the petitioners were directed to
implead the auction purchaser. Subsequently by order
dated 8.9.2010 the petitioners were directed to make
payment of a sum of `13.50 lakhs in order to show
bonafides of the contentions raised.
3. In a statement filed on behalf of the respondent
Corporation it is mentioned that the loan in question was
availed as early as in the year 1997. A term loan of
`60,00,000/- and a work capital loan of `1 lakh was
sanctioned to the borrower and there was chronic default in
repayment of the loan amounts. It is mentioned that on the
W.P(C) No.26108/2010 & 26643/2010 3
basis of requests of the parties re-scheduling was allowed
on 30.3.2010 and even thereafter they had neglected to pay
the loan amounts. The industrial assets were taken over
possession under Section 29 of the State Financial
Corporation Act and on remittance of a sum of `80,000/- the
same was released on 2.3.2010. But they failed to honour
the commitment and accordingly the revenue recovery
steps were initiated. The property in question, which is the
collateral security was sold for a sum of `13.15 lakhs in
public auction. It is mentioned that the petitioners have
never approached the Corporation with any proposal for
‘One Time settlement’, and the balance outstanding as on
16.9.2010 is `60.05 lakhs.
4. On the basis of the interim direction issued by this
Court, the petitioners have remitted a sum of `13.50 lakhs.
It is taken note of that the extent of the land sold in auction
is about 2.50 Acres and the price at which it was sold is
evidently too low. Under such circumstances through an
W.P(C) No.26108/2010 & 26643/2010 4
interim order dated 21.10.2010 this Court directed the
respondent Corporation to treat the sale conducted on
23.7.2010 as cancelled. The bid amount deposited by the
sixth respondent was directed to be returned along with
interest calculated thereon at the rate of 18% per annum
from 26.8.2010 onwards, till payment. The respondent was
directed to deduct the portion of interest to be paid to the
sixth respondent from the amount of Rs.13.50 lakhs
deposited by the petitioners and the balance amount was
directed to be credited in the loan account.
5. When the matter was taken up for consideration
on today, it is submitted by both sides that in compliance
with the order dated 21.10.2010 the Corporation had
returned the amount deposited by the auction purchaser
along with interest as ordered. It is further stated that the
balance amount deposited by the petitioners had already
been credited to the loan account.
6. Under the above circumstances, I am of the view
W.P(C) No.26108/2010 & 26643/2010 5
that no further issue survives for consideration in these writ
petitions. Learned counsel for the petitioners sought
direction for consideration of the request for ‘One Time
Settlement’ of the balance outstanding in the loan account.
Needless to say that the petitioners will be at liberty to
approach the appropriate authority in the respondent
Corporation seeking ‘One Time Settlement’. It is for the
authority of the Kerala Financial Corporation to consider
such request if any made, subject to availability of any
Scheme for settlement and subject to eligibility of the
petitioner under such scheme. If loan transactions involved
in these cases. If the petitioners make any such approach
within a period of three weeks from the date of receipt of a
copy of this judgment, the same shall be considered by the
appropriate authority under the second respondent
Corporation and a decision thereof shall be taken and
communicated to the petitioners, at the earliest possible, at
any rate within a period of one month from the date of
W.P(C) No.26108/2010 & 26643/2010 6
receipt of such request.
7. In order to facilitate the petitioners to make
approach as directed above and for the Corporation to take
a decision thereof, further steps of recovery recovery shall
be kept in abeyance for a period of two months from the
date of receipt of a copy of this judgment.
The writ petitions are disposed of with the above
observations.
Sd/-
C.K.ABDUL REHIM
JUDGE
//True Copy//
P.A to Judge
ab