IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 27232 of 2010(D)
1. K.ABDUL SALAM,PROPRIETOR,CROWN TEX,
... Petitioner
Vs
1. AUTHORISED OFFICER AND CHIEF MANAGER,
... Respondent
2. CHIEF MANAGER,INDIAN BANK,HEAD OFFICE,
3. M/S.EAST WEST TRAVEL AND TRADE LINKS
4. AHAMMED HUSSAIN,S/O.SHAMSUDDIN MUSALIYAR
For Petitioner :SRI.N.K.MOHANLAL
For Respondent :SRI.S.EASWARAN
The Hon'ble MR. Justice C.K.ABDUL REHIM
Dated :11/10/2010
O R D E R
C.K.ABDUL REHIM, J.
-------------------------------------------
W.P.(C).No.27232 of 2010
-------------------------------------------
Dated this the 11th day of October, 2010
J U D G M E N T
———————-
Petitioner claims to be a tenant in a building
which was proceeded against under the provisions of the
Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (SARFAESI Act),
at the behest of respondents 1 and 2. Consequent to default
committed in repayment of a loan availed by the 3rd
respondent, proceedings under the SARFAESI Act was
initiated and the immovable properties of the 3rd respondent
wherein the building in question is situated, was taken over
symbolic possession. The petitioner claims that he is
conducting business in textiles in a portion of the building in
question since 1996 onwards, on the basis of a rental
arrangement entered with the 3rd respondent.
2. The petitioner had approached this court on an
earlier occasion when SARFAESI proceedings were pursued.
Ext.P2 is the judgment of this court in WP(C).No. 10922/10.
W.P.(C).27232/10-D -2-
Referring to a Division Bench judgment of this court in Business
India Builders & Developers Ltd. Vs. Union Bank of India
(2007(2) KLT 237) it is observed that the tenant of a building,
which is proceeded under the SARFAESI Act, has no right over
and above that of the landlord as to continue in occupation from
not being evicted under the proceedings. Therefore the writ
petition was dismissed reserving liberty of the petitioner if any,
to pursue actions to acquire rights and interests over the
property, if he is interested.
3. The above judgment was pronounced during April
2010. It is stated that the Bank had thereafter notified the
property for sale through Ext.P3 notice. It is the contention of
the petitioner that, pursuant to the sale notified, the petitioner
had participated in the proceedings and submitted tender which
was refused to be accepted by the officials of the Bank. Ext.P5 is
the copy of the tender alleged to have been submitted by the
petitioner and Ext.P6 is the copy of Demand Draft alleged to
have been drawn for the purpose of remitting EMD. On rejection
of the tender submitted by the petitioner and conduct of sale, the
petitioner submitted Ext.P7 representation requesting the
authority to conduct re-sale. Since the said representation was
W.P.(C).27232/10-D -3-
not considered, the present writ petition is filed seeking to quash
the sale conducted pursuant to Ext.P3 & P4 notices. It is also
contended that since proceedings for winding up of the 3rd
respondent company is pending before the High Court of
Bombay, the sale proceedings conducted by the respondents 1 &
2, without obtaining sanction from that court is not sustainable.
Petitioner inter alia prayed for a direction to restrain the
respondents 1 and 2 from dispossessing the petitioner from the
building in question.
4. In the counter affidavit filed on behalf of respondents
1 and 2 it is mentioned that the petitioner had not taken any
action pursuant to Ext.P2 judgment which had attained finality
between parties inter se. It is further stated that the allegation
regarding submission of tender documents before the time
stipulated for sale, is absolutely untrue. The petitioner had
never submitted any tender before 11 A.M. on 13.8.2010, as
alleged. It is pointed out that in Ext.R1(a) representation
submitted by the petitioner on 28.8.2010, it is admitted that he
had reached the Bank before “11.30 A.M” with the tender
documents and the Demand Draft whereas the time fixed was
11.00 A.M. It is mentioned that the writ petition was filed much
W.P.(C).27232/10-D -4-
after the date of the sale and after the sale was confirmed. It is
mentioned that the bid submitted by the 4th respondent was
accepted and the sale was confirmed in favour of the 4th
respondent on 24.8.2010 and he was issued with a sale
certificate on 15.9.2010, on deposit of the entire amount. It is
further stated that the sale was confirmed in favour of the 4th
respondent for a sum of Rs.1,37,51,000/-, whereas the tender
alleged to have been submitted by the petitioner is only for an
amount of Rs.13,72,000/-. It is contended by the respondents 1
and 2 that the filing of the writ petition is a sheer abuse of the
process of the court and it was filed only as a part of the
repeated attempts from the side of the petitioner to hold of the
proceedings initiated for realising amounts due from the 3rd
respondent.
5. The 4th respondent had filed a counter affidavit in
which similar contentions as that of respondents 1 and 2 are
raised. It is contended that the challenge raised against the
proceedings is covered against the petitioner in view of various
pronouncements of this court, as reported in 2007(2) KLT 237
and 2005(4) KLT SN 96 (Page 70). It is alleged that the
attempt of the petitioner is in conjunction and collusion with the
W.P.(C).27232/10-D -5-
3rd respondent in an attempt to resist the proceedings initiated
by the Bank and that the petitioner is estopped from raising any
such contention in view of Ext.P2 judgment.
6. While considering the issues involved, it is noticed
that the petitioner had challenged the proceedings based on the
very same claim in Ext.P2 writ petition. The judgment in Ext.P2
deciding the issue had attained finality between parties inter se.
Further, the law settled as on today is to the effect that the
tenant of a building is not having any right to object the
proceedings initiated under SARFAESI Act. However, learned
counsel for petitioner pointed out that the question is now
pending consideration before the Full Bench. It is brought to my
notice that after confirmation of the sale, now respondents 1 and
2 had approached the Chief Judicial Magistrate Court invoking
Section 14(1) of the Act for getting dispossession of the
petitioner from the building. If the petitioner has got any case
that he is entitled to continue in possession by virtue of any
rights as a tenant, it is left open to him to agitate the matter
before the Chief Judicial Magistrate.
7. With respect to challenge against the sale, I do not
find any material discrepancy to interfere with, invoking powers
W.P.(C).27232/10-D -6-
under Article 226 of the Constitution of India. If the petitioner
claims that the sale was vitiated due to any material irregularity,
remedy of the petitioner as a person who claims to have
participated in the sale, is to approach the appropriate forum
under the statute. It is pertinent to note that even though the
petitioner was given liberty to work out his remedies to protect
his interests, through the earlier judgment, nothing is brought
out to show that he had made any attempt in that line. As stated
above, Ext.P2 being a judgment which had attained finality
between the parties inter se, I am not at all inclined for any
interference on the very same issue. Accordingly the writ
petition deserves no merit and the same is dismissed.
However, it is made clear that dismissal of this writ petition
will not cause any prejudice to the petitioner to invoke statutory
remedies if any available to him under law.
C.K.ABDUL REHIM, JUDGE.
okb