IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C) No. 26575 of 2007(L)
1. K.N. SHEREEF, AGED 52 YEARS,
... Petitioner
2. K.A. ASHRAF, AGED 48 YEARS,
3. M. NAEEEMA, AGED 44 YEARS,
4. K.N. SAJITH, AGED 36 YEARS,
Vs
1. THE AUTHORISED OFFICER,
... Respondent
2. UNION BANK OF INDIA,
3. REJI MATHEW,
For Petitioner :SRI.MATHEWS V.JACOB (PARAVUR)
For Respondent :SRI.A.S.P.KURUP, SC, UBI
The Hon'ble MR. Justice ANTONY DOMINIC
Dated :30/10/2007
O R D E R
ANTONY DOMINIC, J.
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W.P.(C) No. 26575 OF 2007 L
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Dated this the 30th October, 2007
J U D G M E N T
The petitioners seek to quash the sale of the
property owned by their deceased mother and also Ext.
P4 notice. There is a further prayer to direct the
respondents to re-auction the property in compliance
with the procedure established by law.
2. The petitioners’ mother late Mariyam Beevi was
a guarantor for the two loans availed of by the two
partnership firms, namely, M/s. Jyothis and M/s.
Associated Enterprises. When default was committed in
repaying the amount to the 2nd respondent bank,
proceedings were initiated under the Securitisation and
Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 against the properties
mortgaged by the deceased mother of the petitioners.
It is stated that when notice of sale of the property
was published, a compromise was arrived at between the
parties on 10-3-2006 and as a result thereof the bids
WPC No.26575/07 – 2 –
received in response to Ext. P2 notice of sale were
withdrawn by the bidders. According to the petitioners
they were continuing efforts to raise necessary amounts
and pay it to the bank and while so to, their shock and
dismay, they received Ext. P3 to the effect that the
sale of the mortgaged property was concluded in favour
of the 3rd respondent. Thereafter Ext. P4 notice was
issued to their mother requiring her to vacate and
thereupon she filed litigations before this Court as
also before the Debt Recovery Tribunal (DRT) which
resulted in its dismissal. It is thereafter that this
writ petition has been filed by the legal
representatives of the guarantor challenging the sale
of the mortgaged properties and also Ext. P4 notice.
Counsel for the petitioners submits that the petitioner
when sale was adjourned following a compromise between
the parties, a subsequent sale could not have been
effected by the respondent Bank without taking fresh
proceedings for that purpose. It is on that ground the
petitioner seeks to quash the sale.
3. The 2nd respondent Bank and also the 3rd
respondent, the purchaser of the property, have filed
WPC No.26575/07 – 3 –
their statements. It is stated by the Bank that the
petitioners’ mother was a guarantor for certain loans
and that the account became Non-Performing Asset (NPA)
and hence proceedings were initiated under the Act. It
is stated that notices were issued under Section 13(2)
and 13(4) and the Bank had taken possession of the
property on 15-2-2006 and invited Ext. P2 tender notice
for sale of the property. According to the Bank the
mother of the petitioners had filed W.P.(C) No. 23447
of 2006 to quash the proceedings in which, this Court
granted her time to file appeal before the DRT and
thereafter S.A. No. 6 of 2007 was filed before the DRT,
withdrawing the writ petition.
4. It is stated that the bids received in response
to the tender notice were scheduled to be opened on 23-
4-2006 in the presence of the tenderers. The
petitioners along with another person who were partners
of the firms approached them and submitted Ext. R1(a)
proposal for settling the liability. The Bank would
state that though the Bank had postponed the opening of
the bids. As the petitioners they did not honour the
terms of the compromise proposed by them they had
WPC No.26575/07 – 4 –
opened the bid and that it was on account of this that
the sale was confirmed. It is stated that the purchaser
has also paid the money to the Bank and the Bank issued
the sale letter as well. Thereafter, the purchaser had
filed W.P.(C) No. 27966/06 which was disposed of by
Ext. R1(b) judgment directing that the Bank is bound to
take effective steps to evict the petitioners’ mother
to put the purchaser in possession. At that stage
petitioners’ mother filed W.P.(C)No.4910/07 challenging
the interim order passed in S.A. No. 6/07. In that
case, this Court issued a direction that the auction
purchaser shall be put in possession of the property
and Ext.R1(c) is the judgment. It is stated that there-
after S.A. No.6 of 2007 filed by the deceased was also
dismissed by the Tribunal. As in the meanwhile the
purchaser, even after having complied with the
conditions of sale was not put in possession, had filed
Contempt of Court Case No. 972/07 which was closed as
per Ext. R1(d) judgment. In the meantime the Bank
proceeded to obtain order of the District Collector
under Section 14 of the Act. Even at that stage
complaining of disobedience of the judgment of this
WPC No.26575/07 – 5 –
Court, the purchaser filed C.O.C No. 1250/07 and that
case now stands posted for the statement of the Bank.
In substance what the Bank would argue is that the
issue canvassed by the petitioner regarding the
correctness or otherwise of the proceedings initiated
by the Bank stands concluded by virtue of the earlier
judgments of this Court. According to the Bank
contentions stated including the one relating to the
invalidity of the sale in favour of the 3rd respondent
have already been considered by this Court and
therefore, it is not open to the petitioners to agitate
this issue once again.
5. The 3rd respondent also would support the
contentions of the Bank. It is stated that the 3rd
respondent having been successful in a public auction
and also having paid the amount, is entitled to be put
in possession of the property.
6. Having considered the submissions on either
side I am inclined to accept the contention of the
respondents. This is a case where proceedings were
initiated under the Act which was fought by the
guarantor at every stage both before this Court and
WPC No.26575/07 – 6 –
before the Tribunal. The Tribunal having accepted the
validity of the proceedings initiated by the Bank,
those issues cannot be gone into by this Court. The
argument raised was only regarding the correctness of
the procedure adopted by the Bank in accepting the
offer of the 3rd respondent. It is true that on account
of the compromise that was proposed by the petitioners
the Bank had deferred the sale. It is also true that
subsequently when the compromise failed the Bank had
confirmed the sale in favour of the 3rd respondent. In
the statement filed by the Bank it has been stated that
as a result of the failure of the compromise the Bank
had issued notice to the 3rd respondent and the tender
was opened in the presence of his authorised
representatives and sale was confirmed for Rs.16 lakhs
which has been paid by the purchaser. In my view this
was the only option that was available with the Bank at
that stage of the proceedings. The Bank had got a
successful purchaser at a time when the petitioners
were trying to delay the proceedings.
7. In any case the guarantor herself had
unsuccessfully filed various proceedings and it is not
WPC No.26575/07 – 7 –
open to the petitioners to take up the very same issues
at this distance of time. If I entertain this writ
petition, I will be defeating the very purpose of the
Act which has been enacted with the laudable object of
speedy recovery of dues to financial institutions. I
do not find any merit in the writ petition. This writ
petition is dismissed, but without any order as to
costs.
ANTONY DOMINIC
JUDGE
jan/-