IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 32954 of 2008(W)
1. JAYALAKSHMI BUILDERS PVT.LTD.,
... Petitioner
Vs
1. KERALA FINANCIAL CORPORATION,
... Respondent
For Petitioner :SRI.E.K.NANDAKUMAR
For Respondent :SRI.R.S.KALKURA
The Hon'ble MR. Justice V.GIRI
Dated :25/11/2008
O R D E R
V.GIRI, J
-------------------
W.P.(C)s.32954/2008 & 33186/2008
--------------------
Dated this the 25th day of November, 2008
JUDGMENT
The issue raised in these writ petitions are
identical in so far it relates to the challenge to the
action taken by the Kerala Financial Corporation to
bring to sale the property in relation to which a loan
facility was availed by the petitioner in Writ petition
No.32954/2008. I will refer to the facts in Writ Petition
No. 32954/2008 in the first instance.
2. Petitioner Company availed of financial assistance
to the tune of Rs.1.5 Crores from the respondent
Corporation for construction of an apartment complex.
Mortgage was created by deposit of title deeds. It now
turns out that the property mortgaged, in which the
construction was put up belongs to the petitioner in
Writ Petition No.33186/2008 and the petitioners in
both these writ petitions were associated in a joint
venture.
W.P.(C).32954 & 33186/2008
2
3. The project could not be completed as there was
default in re-payment of the loan availed by the
petitioner in Writ petition No.32954/2008. It ended in
Ext.P2 letter dated 12.8.2008, whereunder Corporation
agreed for an One Time Settlement of the dues on the
loanee remitting an amount of Rs.250 Lakhs on or before
25.8.2008. Petitioner approached the Corporation and
requested for three months’ time to arrange the One
Time Settlement. According to the petitioner,
Corporation agreed for extension of time, though
there is a dispute as to whether this was actually done.
Petitioner approached this Court in the wake of Ext.P4
letter issued by the Corporation pointing out that the
Corporation has decided to sell the mortgaged assets to
one Ajithkumar, Friends Colony, New Delhi, for an
amount of Rs.4 Crores and that it is open to the
petitioner to remit an amount of Rs.4 Crores, if he
wants to save the property as such. After hearing the
learned counsel for the petitioner and learned Standing
Counsel for the Corporation, this Court had passed an
W.P.(C).32954 & 33186/2008
3
interim order directing further steps, with regard to the
sale of the property be kept in abeyance provided the
petitioner pays an amount of Rs.2.5 Crores on or before
30.11.2008.
4. Writ petition No.33186/2008 was filed on
10.11.2008 by the owner of the mortgaged property and
the essential contention in the said writ petition is that
the land forming part of the mortgaged property belongs
to him and that he had entered into a joint venture with
the petitioner in Writ petition No.32954/2008 and he
had proceeded to make an offer of Rs.4 Crores to the
Corporation.
5. When Writ Petition No.33186/2008 came up for
consideration, I directed that the same be taken up
along with Writ Petition No.32954/2008.
6. I heard Mr.Shaffique, learned senior counsel for
the petitioner in Writ Petition No.32954/2008,
W.P.(C).32954 & 33186/2008
4
Mr.K.R.B.Kaimal, learned senior counsel for the
petitioner in Writ Petition No.33186/2008 and
Mr.R.S.Kalkura, learned counsel appearing for the KFC
in both the writ petitions.
7. I was inclined to seriously consider the offer made
by the petitioner in Writ Petition No.33186/2008 for
payment of an amount of Rs.2.5 Crores, subject to a
reasonable enhancement of the same, because that was
the amount which was projected for One Time
Settlement in Ext.P2 in Writ petition No.32954/2008.
But in circumstances where the owner of the property
namely the petitioner in Writ Petition No.33186/2008
has come forward with an offer of Rs.4 Crores, it would
not be fair or in public interest to still require the
Corporation to abide by the original offer of Rs.2.5
Crores.
8. Once again I take note of the fact that the
petitioner in Writ Petition No.33186/2008 was the owner
W.P.(C).32954 & 33186/2008
5
of the property originally mortgaged and a construction
was made therein, only pursuant to a joint venture
between the petitioners in these two cases.
9. But I am of the view that a reasonable opportunity
must be given to the petitioner in Writ Petition
No.33186/2008 to pay the Corporation an amount of Rs.4
Crores as offered by him. Mr.Kalkura, learned counsel
for the Corporation submits that the person who is the
bidder of the property, referred to in Ext.P5, is
apparently willing to remit an amount of Rs.4 Crores
without further delay. This may be so. After all, the
owner of the property must be given a reasonable chance
to redeem his property and there cannot be any
corresponding interest in favour of a stranger bidder for
the property. If he has remitted any amount, he must be
refunded the same along with interest at a reasonable
rate.
W.P.(C).32954 & 33186/2008
6
10. In the result, writ petitions are disposed of with the
following directions.
(i). Petitioner in Writ Petition
No.33186/2008 shall make a payment of
Rs.4 Crores with interest at the rate of
12%, to be levied with effect from
1.12.2008, on or before 15.1.2009.
Payment may be made either in lump or in
instalments within the time mentioned
above.
(ii). If such payment is made,
Corporation shall consider the same as a
settlement of dues incurred by the loanee,
the petitioner in Writ petition
No.32954/2008.
(iii). If any amount has been deposited by
the bidder, same shall be refunded to him
immediately after 15.1.2009 and the
bidder shall also be entitled to 12%
interest on the amount of Rs.5 Lakhs
deposited by him with the Corporation.
The liability thereon shall also be borne by
the petitioner in Writ Petition
W.P.(C).32954 & 33186/2008
7
No.33186/2008, provided he proceeds to
effect payment as directed in direction
No.1 above.
(iv). It is made clear that if the petitioner
in Writ Petition No.33186/2008 fails to
make the payment in the manner
aforementioned, then it will be open to the
Corporation to proceed against the
property as proposed and obviously any
expenses incurred by them in this regard
could also be recovered from the defaulter.
I have not considered the rights inter se
the petitioners in the writ petitions, which
will have to be worked out by them in
accordance with the terms and conditions
contained in any joint venture agreement
entered into by them.
V.GIRI,
Judge
mrcs