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2025 Supreme(KER) 1060
IN THE HIGH COURT OF KERALA AT ERNAKULAM
N. NAGARESH, J.
Sachu Advaith Mohanachandran - Petitioner
Versus
Priamal Capital And Housing Finance Limited, (Formerly Known As Dewan Housing Finance Corporation Limited), Represented By Its Authorised Officer – Respondent
OP (DRT) No. 418 Of 2023
Decided On : 07-01-2025
Advocate Appeared:
For the Appellant : BY ADVS. ASWIN GOPAKUMAR ADITYA VENUGOPALAN MAHESH CHANDRAN SARANYA BABU NIKITHA SUSAN PAULSON SHALLET K. SAM TOMY THOMAS
For the Respondent: BY ADVS. SRI. DENU JOSEPH SMT. MUHISEENA.V.Z
The court upheld the Debts Recovery Tribunal's dismissal of the stay petition, finding no illegality in its proceedings and confirming the necessity for evidence to support the petitioner's allegations.
Headnote:
(A) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 13(2) - Challenge to the order of the Debts Recovery Tribunal dismissing the stay petition without considering the petitioner's arguments - The petitioner claimed that the Tribunal's failure to consider his arguments amounted to a negation of justice. (Paras 6, 7, 12)
(B) Jurisdiction - The petitioner approached the High Court under Article 227 of the Constitution of India, but the court found no justification for interference as the matter should be taken up before the Appellate Tribunal under Section 18 of the Act. (Paras 9, 10)
Facts of the case:
The petitioner challenged the order of the Debts Recovery Tribunal dismissing his stay petition regarding the possession of mortgaged property after defaulting on a loan due to financial losses from the Covid-19 pandemic.
Findings of Court:
The court found no illegality in the Tribunal's order and stated that the allegations made by the petitioner required evidence and should be decided by the Tribunal.
Issues: The main issue was whether the Tribunal's dismissal of the stay petition without considering the petitioner's arguments constituted a denial of justice.
Ratio Decidendi: The court ruled that the Tribunal acted within its jurisdiction and that the petitioner should pursue remedies available under the Act rather than invoking Article 227.
Result: The original petition is dismissed.
JUDGMENT :
(N. NAGARESH, J.)
Ext.P9 order dated 18.09.2023 in I.A.No.1456/2021 in S.A.No.249/2021 of the Debts Recovery Tribunal-I, Ernakulam is under challenge, by the petitioner-applicant.
2. The petitioner’s father owned “Green Valley Multitheme Park and Convention Centre”. The respondent- Housing Finance Company advanced Rs.2,51,27,039/- as SME Property Loan to the petitioner on 31.07.2018. The petitioner states that he duly repaid EMIs from August, 2018 to March, 2020 (20 months). Soon thereafter, Covid-19 pandemic broke out and the petitioner’s industry suffered substantial financial loss.
3. The Convention Centre was taken over by the District Disaster Management Authority in July, 2020 and used it as Covid First Line Treatment Centre till April, 2021. On 30.04.2021, the respondent issued notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 . The petitioner submitted a reply to Section 13(2) notice. The application of the petitioner to restructure the loan was rejected.
4. The petitioner filed Ext.P1 S.A.No.249/2021 before the Debts Recovery Tribunal-I, Ernakulam challenging the Demand Notice and subsequent Possession Notice, along with Ext.P2 I.A.No.1456/2021 for stay. The petitioner would submit that in 2021, the officers of the respondent approached the petitioner and discussed about regularisation of the loan account since the petitioner was making EMI remittances regularly.
5. Contrary to discussion, the respondent filed M.C.No.367/2022 in the Chief Judicial Magistrate's Court, Pathanamthitta. The Chief Judicial Magistrate's Court passed Ext.P3 order on 21.11.2022 appointing an Advocate Commissioner to take over possession of the secured asset mortgaged by the petitioner. The Advocate Commissioner issued Ext.P4 notice to the petitioner. The petitioner challenged Ext.P3 order in W.P.(C) No.3886 of 2023. The writ petition was dismissed.
6. The petitioner filed W.A No.1295 of 2023. The said Writ Appeal was disposed of as per Ext.P5 judgment dated 14.07.2023 directing the Debts Recovery Tribunal to pass orders on Ext.P2 stay petition. The Debts Recovery Tribunal, however, dismissed the stay petition as per Ext.P9 order dated 18.09.2023, without considering the arguments of the petitioner.
7. The petitioner argues that the Debts Recovery Tribunal dismissed the stay petition without considering his arguments. Failure of the Tribunal to consider the arguments amounts to negation of justice. In such circumstances, the petitioner cannot be forced to file statutory Appeal before the Appellate Tribunal making heavy statutory deposit. The Tribunal’s failure to consider and scrutinize the contentions of the petitioner makes Ext.P9 order unfair and unreasonable, urged the petitioner.
8. The respondent resisted the writ petition filing counter affidavit. The respondent submitted that an amount of Rs.3,66,92,203/- is outstanding and an amount of Rs.1,67,79,085/- is lying as overdue as on 12.04.2024. When substantial amount of public money is recoverable, the petitioner, after suffering an order in the form of Ext.P9, had approached this Court without service of notice of OP(DRT) to the counsel appearing for the respondent before the Debts Recovery Tribunal as well as before this Court and has managed to obtain an interim order not to dispose of property, on 11.10.2023. Based on the said order, no amounts have been paid till date and outstanding as well as overdue is mounting. Thereafter, in spite of specific direction on 30.10.2023 to serve copy, the copy of the original petition was not served for a while and thereafter on 19.12.2023 the matter was referred to mediation and interim order got extended until 11th April. As a matter of fact, the petitioner willfully dragged on the mediation proceedings and has failed to fulfill his commitments to arrive at a settlement and accordingly the mediation process failed.
9. Respondent has filed Ext.P7 counter affidavit
