IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 34972 of 2008(L)
1. N.K.DAMODARAN, AGED 58 YEARS, S/O.
... Petitioner
Vs
1. STATE BANK OF TRAVANCORE KOZHA,
... Respondent
2. BRANCH MANAGER, STATE BANK OF
3. MARRY JOH, ADVOCATE COMMISSIONER,
4. P.S.SAJIMON, PUTHEN PARAMBIL (H)
For Petitioner :SRI.JIJO JOSEPH
For Respondent : No Appearance
The Hon'ble MR. Justice THOTTATHIL B.RADHAKRISHNAN
Dated :26/11/2008
O R D E R
THOTTATHIL B.RADHAKRISHNAN, J.
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W.P(C).No.34972 OF 2008
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Dated this the 26th day of November, 2008
JUDGMENT
Standing counsel appears for respondents 1 and 2. Notice
to the third respondent dispensed with. Notice to the 4th
respondent dispensed with preserving his right to move for
review of this judgment, if aggrieved.
2. Petitioner’s case is that as per Ext.P1 dated 10.10.2007, he
purchased an item of property from the 4th respondent without
knowing that the said person is indebted to the first respondent
bank. Going by Ext.P3 plaint, the 4th respondent had availed a
loan of Rs.5 lakhs as a cash-credit facility on 16.7.2002 and had
created equitable mortgage by depositing the title deed of the
property in question. From Ext.P4 it is evident that the account
became an NPA, was so classified and notice under Section 13
(2) of the SARFAESI Act was issued on 16.1.2008, following
which, Sections 13 (4) and 14 have been invoked and the Chief
Judicial Magistrate has appointed an advocate as Commissioner
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to enforce dispossession. In the aforesaid scenario, it cannot
but be conceded by the petitioner that his right could, at the
best, be only to seek intervention to issue a protective order
against dispossession for a short time since the security interest
created by way of mortgage was long before the sale in his
favour and any bonafide transfer, even for valuable
consideration, is no defence in defeasance of the mortgage and
the right of the mortgagee for sale of the security interest. Even
if any rights were created in terms of the Transfer of Property
Act, they stand excluded by the operation of the provisions
contained in the SARFAESI Act. Therefore, there is no merit in
the contention of the petitioner on the strength of his title based
on Ext.P1 sale.
Repelling all the contentions and taking note of the fact
that Ext.P3 suit is in its primitive stage and Ext.P4 proceedings
under section 14 of the SARFAESI Act has germinated on the
basis of notice under Section 13 (2) issued on 16.1.2008, it is
ordered that the impugned distress action will stand deferred if
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the petitioner remits Rs.1,00,000/- within 10 days and an amount
of Rs.2,00,000/- on or before the last working day of December,
2008 and continues to remit amounts at the rate of Rs.1,00,000/-
per month, payable on or before the last working day of every
month commencing from January, 2009 and thereby wipes off
the entire outstandings including accruals. However, if there is
default in remitting any of the instalments as aforesaid, the
benefit of this judgment shall stand recalled automatically and
distress action shall follow. It is also clarified that this judgment
does not preclude the petitioner to sue the 4th respondent for
compensation and other reliefs in accordance with law, in view
of the payments being made by the petitioner under distress.
The writ petition is ordered accordingly.
Sd/-
THOTTATHIL B.RADHAKRISHNAN,
Judge.
kkb.