2001 Supreme(Ker) 271
Judges : M.RAMACHANDRAN
George Joseph - Appellant
Versus
Kerala Financial Corporation - Respondent
Case No : O.P.No. 1666 of 1998
Decided On : 06/28/2001
Advocates Appeared :
Roy Chacko For Petitioners V.B. Unniraj, N.RK. Nair & Anil Sivaraman For Respondents
Headnote:
State Financial Corporation Act 1951, Section 29 - Act, 1968 without resorting to provisions of the Kerala Buildings (Lease and Rent Control) Act 1965 - Sequence of events including background in which Ext - Was served are given by petitioner in paragraph of O.P - Which could be extracted hereunder fact of matter is that while shop rooms and office space mentioned above was in existence respondent happened to take a loan from KFC for an extension of shop building mentioned above - In fact loan was for putting up a tourist home behind shop building mentioned above - For taking loan a mortgage was executed on by respondent to KFC - Held, Preservation of funds of Corporation is one side of picture - But hard earned fortunes of a citizen who had been lured into relationship with Corporation also deserved at least a fractional attention - It should not have been allowed to go down drain for inept management of affairs by Corporation - Court leave open issue as to liability of third respondent which arose after date of Ext - Prayers Writ Petition are misconceived and merely self serving.
M. Ramachandran, J.
The petitioners claim to be tenants of the third respondent, and the Writ Petition has been filed challenging Ext. P1 and similar notices issued by the first respondent-Kerala Financial Corporation (KFC for short). There is also a prayer for a declaration that the petitioner being tenants of the shop rooms of the third respondent, are entitled to continue their occupation until such time they are evicted through methods authorised by the Kerala Buildings (Lease and Rent Control) Act, 1965 (for short, Rent Control Act) at the instance of the landlord.
2. According to the petitioners, the tenancy arrangement commenced in 1985 to 1992 period, in respect of the premises situated in the Changanacherry Municipality. The sequence of events, including the background in which Ext. P1 was served, are given by the petitioner in paragraph 3 of the O.P. which could be extracted hereunder:
"The fact of the matter is that while the shop rooms and office space mentioned above was in existence 3rd respondent happened to take a loan from the KFC for an extension of the shop building mentioned above. In fact, the loan was for putting up a tourist home behind the shop building mentioned above. For taking the loan a mortgage was executed on 5.12.92 by the 3rd respondent to the KFC. The mortgage was of the property 32 cents having the shop building and proposed Tourist Home behind the shop building. With the money availed of from the KFC 3rd respondent put up Tourist Home behind the shop building mentioned above. However, in the matter of repayment of the loan there was default, the consequences of which was the KFC took steps for recovery of the loan and accordingly S.29 of the State Financial Corporation Act provision was resorted to and they took symbolic possession of the hypothecated property viz., 32 cents. This took place on 14.12.1997. On the same day itself KFC issued notice to the petitioners who are in occupation of the shop rooms and godown as mentioned above, intimating them to vacate the premises within 15 days of the issuance of the notice. Copy of the said notice issued to 1st petitioner is produced herewith and marked as Ext. P1. Similar notices issued to other petitioners also. For brevity they are not produced herewith".
The text of Ext. P1 notice also might be relevant, and it was as following:
"This is to inform you that the Corporation has taken over the entire possession of M/s. Priya Tourist Home (Prabha International) under S.29 of the State Financial Corporation's Act, 1951 with effect from 14.1.1998. During the process of taken over, we come to know that you are illegally occupying a part of this complex without the consent or permission from the Corporation. We hereby give you notice to vacate the premises and hand over possession to the Corporation within 15 days from the date of this notice."
3. The operation of Ext. P1 has been stayed by interim orders. The Income Tax Department had also initiated recovery steps, and the officer is respondent No. 4, but in view of the payments made, they are no more interested in the present adjudication. The third respondent- landlord had filed two affidavits and she had pointed out that because of the pendency of the Original Petition her liabilities were mounting up in lakhs, as steps for disposing of the properties alone would have come to her rescue from the debt trap. The outstanding are above Rs. 85 lakhs. She wanted an early hearing, and also a direction to be issued to the petitioners in the Original Petition to pay the rent directly to the KFC. Her stand on the merit was that the Original Petition was misconceived, for that petitioners were given licence to occupy the building for 11 months, well before Ext. P1, and their occupation after the term was as statutory tenants, and especially after Ext. P1 the petitioners could not claim protection of the Rent Control Act, and the KFC was bound and obliged to take up follow up steps by resorting to the p