Shihab vs The Authorised Officer Uco Bank on 21 October, 2010

       

  

  

 
 
  IN THE HIGH COURT OF KERALA AT ERNAKULAM

WA.No. 619 of 2010()


1. SHIHAB, AGED 29 YEARS,S/O.KUNHU
                      ...  Petitioner
2. NISHAD,AGED 43 YEARS, S/O.KUNHU

                        Vs



1. THE AUTHORISED OFFICER UCO BANK,
                       ...       Respondent

2. UCO BANK, WELLINGTON ISLAND BRANCH,

3. K.T.UNNIKRISHNAN, KUNCHENVELIYIL,

4. ASHLEY NAIR, ADVOCATE, ALAPPUZHA BAR

                For Petitioner  :SRI.B.PRAMOD

                For Respondent  :SRI.GEORGE MATHEWS

The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice K.SURENDRA MOHAN

 Dated :21/10/2010

 O R D E R
                    C.N.RAMACHANDRAN NAIR &
                         K.SURENDRA MOHAN, JJ.
               ....................................................................
                         Writ Appeal No.619 of 2010
               ....................................................................
                Dated this the 21st day of October, 2010.

                                      JUDGMENT

Ramachandran Nair, J.

The appellants, tenants in a mortgaged building, are challenging

securitisation proceedings initiated by UCO Bank for recovery of loan

availed by a person for whom the building owner stood as surety. The

property taken on lease by the appellants is the property mortgaged by

third respondent to the Bank. We do not think the Bank’s mortgage

right can be defeated by the mortgagor engaging tenants in the

building. It is common knowledge that tenanted building cannot be

sold at market value or the value that could be obtained on sale of a

tenanted building will be much lower the market value it would fetch if

sold without tenants. On equitable considerations the relief that we

could extend to the appellants is to allow them to clear the arrears due

to the Bank and purchase the building. Since sale could not take place,

the Bank would after notice to the building owner offer to sell the

property to the appellants for the debt amount and if appellants remit

2

the amount, the property should be sold to the appellants after notice to

the building owner and giving an opportunity to him to find another

buyer or to discharge the debt or purchase the property by himself on

clearing the arrears. The appellants are given one month’s time to

approach the Bank for purchase of the property and if substantial

amount is paid, then the Bank should give reasonable time for them to

raise balance amount to purchase the property. If the appellants do not

make any concrete proposal, then the appellants shall give the building

free of possession to the Bank on expiry of thirty days from today.

Writ Appeal is disposed of as above.

C.N.RAMACHANDRAN NAIR
Judge

K.SURENDRA MOHAN
Judge

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