A bank can reject a proposal for partial property sale if it is insufficient to satisfy the outstanding debt, emphasizing the need for bona fides in settlement efforts.

JUDGMENT

The petitioner has approached this Court challenging Ext.P8 sale notice issued by the 1^st respondent bank for recovery of amounts due under credit facilities availed by the petitioner. According to the petitioner, the property of the petitioner, that is mortgaged to the 1^st respondent bank is an extent of 44 cents along with a house having an extent of 3500 sq.ft in Piravom Municipal Town area. It is the case of the petitioner that a sale of only a portion of the property, excluding the residential house, will be sufficient to settle the liability with the bank. A perusal of the pleadings will indicate that when the bank had earlier brought the property to sale in the year 2023, the petitioner had approached this Court by filing W.P(C)No.16731 of 2023, which was disposed of on

02.08.2023, directing as follows:

“2. The learned counsel appearing for the

1^st respondent Bank submits that sale pursuant to Ext.P1 did not fructify. It is submitted that the question of selling a portion of the property belonging to the petitioner does not arise in this case as the residential house of the petitioner is situated right in the middle of the property and there is no way or manner in which a portion of the property can be sold by the Bank. It is submitted that since the sale notified as per Ext.P1 has not taken place, if the petitioner were to make a suitable representation to the respondent Bank, the same can be considered by a competent authority of the respondent Bank. The learned counsel for the respondent Bank submits that the present liability is more than Rs.75 lakhs.

Having heard the learned counsel for the petitioner and the learned counsel appearing for the respondent Bank and considering the fact that the sale pursuant to Ext.P1 has not fructified, I dispose of this writ petition directing that if the petitioner makes a representation before a competent authority of the respondent Bank specifying the manner in which a portion of the property of the petitioner can be sold to recover the amounts due to the 1 st respondent Bank, within period of ten days from today, the same shall be considered by the Bank without undue delay and at any rate before notifying the property for sale again. The decision taken by the Bank shall also be communicated to the petitioner. It is made clear that unless the petitioner specifies clearly as to how a portion of the property can be sold, it is not necessary for the respondent Bank to consider the representation filed by the petitioner.”

Thereafter, the petitioner preferred Ext.P5 before the 1^st respondent bank. By Ext.P6 communication dated 19.12.2023, the bank informed the petitioner that his proposal to sell a portion of the property cannot be acceded to, as the fair value of the land fixed by the Government is only Rs.1.98 lakh per Are, and the market value may not exceed Rs.3,00,000/- per cent. It was pointed out that, as on 19.12.2023, the amount recoverable by the bank was a sum of Rs.75,10,311/-. The petitioner preferred Ext.P7, disputing the valuation of the property. However, he did not choose to challenge Ext.P6 communication in any manner. This writ petition was filed when the bank again notified the property for sale on 20.03.2025. When this writ petition came up for admission, this Court granted an unconditional interim order on 18.03.2025. Thus it is clear that, even after approaching this Court by filing W.P(C)No.16731 of 2023, which was disposed of as early as on 02.08.2023, and though the bank had issued Ext.P6 communication to the petitioner indicating as to why a sale of a portion of the mortgaged property would be insufficient to recover the liability, the petitioner chose to remain silent and has approached this Court again, raising the very same contention only