The court affirms that non-execution of sale deeds under tripartite agreements can lead to classification of loan accounts as fraudulent.

JUDGMENT

Muralee Krishna, J.

The petitioner in W.P.(C)No.44819 of 2025 filed this writ appeal under Section 5 (i) of the Kerala High Court Act , 1958, challenging the judgment dated 15.01.2026 passed by the learned Single Judge in that writ petition.

2. Going by the averments in the writ petition, the appellant had a company which was undertaking the construction of residential buildings in the name and style “Hillary International”. During 2008, the appellant undertook the construction of an apartment, namely, AI Residency, through the company. The apartment complex had eight apartments in total, and one apartment was taken by the appellant itself and the other seven apartments were agreed to be sold as per the agreement for sale, and construction agreements were also entered into between the company and prospective purchasers. There were Tripartite agreements between the appellant, the 1^st respondent Bank and the prospective purchasers for availing purchase loans. The appellant has not created any mortgage in respect of his property with the Bank. The appellant has suffered a huge loss in the project as the persons who committed to purchase the apartment backed from the project, and the entire burden is on the shoulders of the appellant and the appellant has made substantial payments to the tune of Rs.1,31,15,000/- as on 30.06.2025 towards different loan accounts held by different purchasers who entered into tripartite agreements with the bank. The appellant also offered for a settlement by the Bank and directed to place the proposal for One Time Settlement and an amount of Rs.32,00,000/- was directed to be remitted to the Bank into the Stress Asset Account with an assurance that the said amount will be refunded if the settlement proposal is not accepted by the Bank. Now, the Bank is not considering the proposal for settlement and has issued an order declaring the company of the appellant as fraudulent. With these pleadings, the appellant sought the following reliefs in the writ petition filed under Article

226 of the Constitution of India ;

a) Issue a writ of mandamus or any appropriate writ order or direction, directing the Respondent to grant sufficient instalments to pay the entire outstanding amount in the loan account and to release the entire documents pertaining to the loans.

b) Issue a writ of mandamus or any appropriate writ order or direction, directing the Respondents to consider Exts.P5 to P10 compromise offer letter and grant a one-time settlement to the petitioner to clear the liability with the bank.

c) To declare that Ext.P16 to P20 orders will not be binding on the petitioner as the same is passed against the company Hillary International.

d) Issue a writ of mandamus or any appropriate writ order or direction, directing the 1^st Respondent to release the documents pertaining to the Loan Account No

67143832610.

e) Issue a writ of mandamus or any appropriate writ order or direction, directing the 1^st Respondent to issue the statement of account pertaining to the accounts covered by Ext P15 to P20 orders to the petitioner forthwith.

3. The 1^st respondent filed a counter affidavit dated

01.01.2026, opposing the pleadings in the writ petition. It is inter alia contended by the 1^st respondent that on the basis of Tripartite agreements executed by prospective buyers of the apartments proposed to be constructed, the appellant and the bank, credit facilities were sanctioned by the Bank. However, it was subsequently found out that the appellant had availed the credit facilities, and the b