IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 20710 of 2009(G)
1. SAHADEVAN,
... Petitioner
Vs
1. AUTHORISED OFFICER,
... Respondent
2. P.J.STALIN,
3. S.I.OF POLICE, ELOOR POLICE STATION.
For Petitioner :SRI.GIKKU JACOB
For Respondent :SRI.K.K.CHANDRAN PILLAI, SC, HDFC
The Hon'ble MR. Justice P.R.RAMACHANDRA MENON
Dated :16/06/2010
O R D E R
P.R.RAMACHANDRA MENON, J
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W.P(C) No.20710 of 2009-G
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Dated this the 16th day of June, 2010.
J U D G M E N T
The petitioner, who is a stranger to the loan transaction with
the respondent Bank, has filed this Writ Petition seeking for a
direction to allow the petitioner to remit the arrears of the loan on
behalf of the second respondent/borrower, if the same is not
remitted by him within a reasonable time and to effect the future
instalments on the respective due dates and for some incidental
reliefs.
2. The sequence of events as described by the learned
counsel for the petitioner is that the property, which originally
belonged to the petitioner, was sold to the second respondent for
valuable sale consideration. It is stated that the second respondent
had borrowed some amount from the respondent Bank for
purchasing this property from the petitioner, creating security
interest over the property in question. But the entire sale price
payable to the petitioner is stated as not satisfied, under which
circumstances, there is some arrangements between the petitioner
W.P(C) No.20710 of 2009-G 2
and the second respondent/borrower; based on which, the
petitioner is continuing to occupy the premises.
3. While so, since the second respondent did not satisfy the
liability to the first respondent Bank, the account was declared as
‘NPA’ and the Bank proceeded with steps under the SARFAESI Act to
take physical possession of the premises and to have the same sold
in public auction. It was in the said circumstances, the petitioner
approached this Court by filing the above Writ Petition seeking for a
direction to permit the petitioner to clear the liability on behalf of
the second respondent and to have the loan account regularised.
4. The learned counsel for the Bank submits with reference
to the contends of the counter affidavit that, the petitioner has filed
the Writ Petition without revealing the true state of affairs and in a
clandestine manner, colluding with the second respondent. After
considering the matter on admission, this Court ordered notice on
23.7.2009 and since there was no interim order of stay, the Bank
proceeded with further steps by filing a petition under Section 14 of
the SARFAESI Act before the Chief Judicial Magistrate’s Court,
Ernakulam, for rendering necessary assistance to take physical
possession of the building. The property along with the building
W.P(C) No.20710 of 2009-G 3
was taken possession of and handed over to the respondent Bank
and the Advocate Commissioner filed a report before the Chief
Judicial Magistrate’s Court, complying with the direction, as borne
by Ext.R1(d).
5. The case of the respondent Bank is that, subsequent to
taking over the possession as above and inspite of placing a security
guard at the premises, the petitioner herein took the law into his
hands; threatened and drove away the security guard; forcefully
took over the possession of the building and started living there,
which made the Bank to file complaints before the Police, as borne
by Exts.R1(e) and (f). The Bank also filed a petition before the Chief
Judicial Magistrate’s Court pointing out the sequence of events,
which is stated as already heard and reserved for orders.
6. The learned counsel for the Bank submits that the
petitioner does not have any `locus standi’ to file this Writ Petition,
more so, in view of the fact that the property was sold by the
petitioner himself to the second respondent and the sale
consideration, to an extent of Rs.21 lakhs was provided by the Bank
by way of crossed cheque, in the name of the petitioner by way of
the loan facility extended to the second respondent/borrower, on
W.P(C) No.20710 of 2009-G 4
the strength of the security interest created over the property by the
purchaser ie. the second respondent.
7. The learned counsel for the petitioner submits that the
proceedings finalised by the Bank were behind the petitioner and
that the rights and interests of the petitioner, over the rights of the
second respondent, are not liable to be adversely affected in any
manner. This Court finds it difficult to accept the version of the
petitioner. The sale effected by the petitioner in favour of the
second respondent is complete. The second respondent/borrower
created security interest over the property in question in connection
with the loan availed from the Bank. The amount of sale
consideration disbursed by the Bank was directly to the petitioner by
way of crossed cheque, as agreed among the parties. The cause of
action sought to be agitated on the basis of the alleged rights
between the petitioner and the second respondent, can’t thwart the
rights and liberties of the Bank under the SARFAESI Act. In other
words, the cause of action for the petitioner, if any, in respect of the
alleged non-payment of the sale consideration by the second
respondent, is entirely different from the cause of action being
pursued by the Bank in connection with the loan extended to the
W.P(C) No.20710 of 2009-G 5
second respondent. This Court finds that the Bank is perfectly
justified in proceeding against the second respondent/borrower,
who has not chosen to challenge the same in any manner. This
being the position, the Bank is at liberty to proceed with further
steps for getting the physical possession of the property concerned
and to have the same sold in the public auction, in accordance with
law. The rights and liberties of the petitioner if any, as against the
second respondent, are left open. Relief’s sought for in the Writ
Petition are not correct or sustainable. Interference is declined and
the Writ Petition is dismissed accordingly.
Sd/-
P.R.RAMACHANDRA MENON
JUDGE
//True Copy//
P.A to Judge
ab