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2021 Supreme(Online)(KER) 19699
HIGH COURT OF KERALA
A.M.BADAR, J
V.V JOSEPH – Appellant
Versus
KERALA STATE CO-OPERATIVE BANK, – Respondent
WP(C)/6988/2021
SRI.BENOJ C AUGUSTIN, SRI.TITTO THOMAS, SMT.P.PARVATHY
Writ jurisdiction cannot override statutory remedies when available; courts must respect the statutory frameworks for recovery of debts.
Headnote:
Writ Jurisdiction - Petitioners vs Secured Creditor - SARFAESI Act - Sections 13, 14, 17 - The court held that the statutory remedies under the SARFAESI Act take precedence over the writ jurisdiction, emphasizing the importance of following established legal frameworks for debt recovery.
Fact of the Case:
The petitioners took a loan from the secured creditor, secured against property, with the loan term ending in 2018. They sought to quash an order for possession by the secured creditor, citing a pending compensation claim from a third party as rationale for repayment via installments.
Finding of the Court:
The court found the petitioners were in default and that the secured creditor had acted in compliance with the SARFAESI Act provisions. The court ruled it lacked jurisdiction to intervene under Article 226 where alternative statutory remedies were available.
Issues: Whether the court should exercise its jurisdiction under Article 226 when there is a statutory remedy available under the SARFAESI Act for the petitioners' claims.
Ratio Decidendi: The existence of an effective alternative statutory remedy under the SARFAESI Act precludes the court from exercising its writ jurisdiction, reinforcing judicial discipline in adhering to established legal procedures.
Final Decision: The petition was dismissed.
JUDGMENT
Dated this the 18th day of March 2021 The petition is with the following prayers.
“(i) Issue a writ of certiorari or any other appropriate writ, order or direction to quash Ext.P4 order.
(ii) Issue a writ of mandamus or any other appropriate writ to stay all the proceedings initiated by the 1st respondent bank against the property of the petitioners.
(iii) Issue a writ of mandamus or any other appropriate writ order or direction directing the 1st respondent to permit the petitioners to pay an amount of Rs.20,000/- per month towards the amount due to the 1st respondent bank till the disposal of CRP No.191/2018 or in the alternative, permit the petitioners to pay the outstanding liability due to the 1st respondent bank in 30 monthly instalments.
(iv) Issue such other writ order or direction which this Hon'ble Court may deem fit and proper in the facts and circumstances of this case. “
2. Heard the learned counsel for the petitioners. He argued that the petitioners had availed loan from the 1st respondent Bank to the tune of Rs.20,00,000/- by mortgaging the landed property wherein the residential building is located. The tenure of the loan ended on 04/09/2018. According to the learned counsel for the petitioners, the 2nd respondent had drawn a 400KV line through the property. The inadequate compensation in respect of drawing the electric line through the property was awarded. The appeal was preferred by the 1st petitioner before the District Court and accordingly, award for Rs.33,32,094/- along with 9% interest came to be passed against the 2nd respondent – Power Grid Corporation of India Ltd. That award has been challenged before this Court in CPR No. 191/2018 and there is no stay to the said award. Thus, the petitioners are entitled for an amount of about Rs.55 lakhs from the 2nd respondent- Power Grid Corporation of India Ltd. With this, it is argued that the petitioners would pay the amount of loan in instalments and this Court can also direct the 2nd respondent to directly pay the amount under the award to the 1st respondent for satisfying its debt. The petitioners, therefore, prayed that the communication at Ext.P5 be stayed till disposal of the instant petition.
3. The learned counsel for the 1st respondent secured creditor argued that contract entered into by the 1st respondent was with petitioners and the 1st respondent secured creditor has no privity of contract with the 2nd respondent – Power Grid Corporation of India Ltd. According to the 1st respondent, loan was taken by petitioners on 04/09/2015 and term of that loan has already expired on 03/09/2018. The recalled amount is more than Rs.33 lakhs and as of now, the Advocate Commissioner had issued notice for taking possession of the secured assets as per the provisions of the SARFAESI Act .
4. I have considered the submissions so advanced and perused the materials placed before me. Undisputedly, on 04/09/2015, petitioners had availed loan of Rs.20 lakhs by mortgaging the house property. On the own admission of the petitioners, duration of that loan expired on 04/09/2018. Ext.P4 is the order passed by the learned CJM, Kozhikode, under Section 14 of the SARFAESI Act . That order shows that on
29/12/2017, demand notice under Section 13 (2) of the SARFAESI Act was issued to the petitioners directing them to deposit the required amount of loan within 60 days. The said notice was not complied, and as such, the matter proceeded further and that is how, the learned CJM on 28/01/2020 has passed the order at Ext.P4 appointing the Advocate Commissioner to take physical possession of the secured asset. Accordingly it is seen that notice at Ext.P5 came to be issued by the learned Advocate Commissioner for taking possession.
5. The petitioners have challenged these steps initiated by the secured creditor by resorting to the provisions of the SARFAESI Act . 6. Following are the observations of the Hon'ble Supreme Court in the matter ofAuthorized Officer, State Bank of Travancor
