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IN THE HIGH COURT OF KERALA AT ERNAKULAM
HRISHIKESH ROY, A.K. JAYASANKARAN NAMBIAR, JJ.
Ratheesh - Petitioners
Versus
Debt Recovery Tribunal (Kerala and Lakshadweep) - Respondents
W.P.(C) No.30651 of 2017
Decided On : 19-02-2019
Statement of facts :
From W.P.(C).No.30651/2017, which is filed by Sri. Ratheesh M.N., who is stated to be the auction purchaser of property comprising of 18.200 cents in Sy.No.648/7/3 of Thrikkakkara North Village, pursuant to a public-e-auction conducted in accordance with the Recovery certificate dated 9.9.2005 issued consequent to the final order of the Debts Recovery Tribunal in O.A.No.6/2005.
Finding of the Court:
i. The sale that took place on 24.02.2014, having breached the condition in Rule 68B of the Second Schedule to the I.T. Act requiring it to take place within three years from the date of the recovery certificate, is set aside as illegal and void.
ii. As a consequence to the said declaration, the Recovery certificate issued by the Debt Recovery Tribunal on 09.09.2005, the Sale proclamation dated 28.10.2013 as also the order dated 22.5.2015 of the Recovery Officer, DRT (Ext.P5), by which an Advocate Commissioner was appointed for the purposes of executing the final order dated 10.6.2005 of the DRT, are also set aside.
iii. The mortgagor petitioner in O.P.(DRT).No.136 of 2018 shall pay an amount of Rs. 43,51,362.85 to the bank in order to redeem the mortgaged property. He shall, in addition to the said amount, pay an amount of Rs. 1,89,000/- to the auction purchaser, petitioner in W.P.(C) No.30651 of 2017. The said payments shall be effected on or before 15.3.2019. On the said payments being made, the mortgagor shall be entitled to return of the title deeds in respect of the mortgaged property from the bank and on receipt of the same, he shall approach the village officer, with whom we had entrusted the task of securing vacant possession of the mortgaged property, for obtaining restoration of possession of the property.
iv. If the petitioner in O.P.(DRT).No.136 of 2018 defaults in payment of the aforesaid amounts, within the time granted, the bank will be free to proceed with the recovery steps based on the Final Order dated 10.06.2005 of the Debt Recovery Tribunal in O.A.No.6 of 2005. In that event, the bank will be at liberty to seek a fresh recovery certificate from the Recovery Officer of the Debt Recovery Tribunal. The bank will also, in that event, be entitled to have vacant possession of the mortgaged property and the village officer shall do the needful to ensure that.
v. As for the auction purchaser, he shall be entitled to a return of the purchase money paid by him for the property at the sale held on 24.04.2014. He shall also be entitled to the bank rate of interest, as applicable to savings accounts, for the said amount for the period from the date of payment of the purchase price to the date of refund to him of the said sum by the bank. Further, in the event of the petitioner in O.P.(DRT).No.136 of 2018 not paying him the amount of Rs. 1,89,000/- within the time granted in this judgment, he is permitted to recover the said amount from the bank which, in turn, shall add the said sum to the amounts outstanding from the mortgagor and treat it as forming part of the decree amount recoverable from the mortgagor.
Result : W.P.(C).No.30651 of 2017, preferred by the auction purchaser, seeking police protection for execution of the warrant of the Recovery Officer of the Debt Recovery Tribunal is dismissed, and O.P. (DRT).No.136 of 2018 preferred by the mortgagor is allowed.
A.K. JAYASANKARAN NAMBIAR, J.
As the aforementioned Writ Petition and O.P.(DRT) involve a common issue, they are taken up together for consideration and disposed by this common judgment. For the sake of convenience, the reference to facts and exhibits is from W.P.(C).No.30651/2017, which is filed by Sri. Ratheesh M.N., who is stated to be the auction purchaser of property comprising of 18.200 cents in Sy.No.648/7/3 of Thrikkakkara North Village, pursuant to a public-e-auction conducted in accordance with the Recovery certificate dated 9.9.2005 issued consequent to the final order of the Debts Recovery Tribunal in O.A.No.6/2005.
2. The brief facts necessary for a disposal of these cases is that, one A.R. Sajan (borrower) and Sri. M.V. Shaji (guarantor), who are arrayed as respondents 6 and 7 in W.P.(C).No.30651/2017, had availed a loan from the Lord Krishna Bank (subsequently taken over by the HDFC Bank, the 5th respondent) by depositing the title deeds in respect of the property aforementioned. Consequent to a default committed by the said persons, in repaying the amounts due to the bank, the bank filed O.S.No.39/1999 against the said defaulters, for recovering the loan amounts. The original of the title deeds, pertaining to the property that was mortgaged with the bank, was produced before the IInd Additional Sub Court, Ernakulam, in connection with the aforesaid suit. It would appear that, in the suit, a consent decree was passed on 3.3.2000, where under, the 6th and 7th respondents were directed to pay an amount of Rs. 6,04,273/- together with future interest @ 20.75% per annum with quarterly rests from the date of the suit till realisation thereof. An amount of Rs. 27,736.50 was also directed to be paid to the plaintiff by way of costs.
3. For executing the decree, O.A.No.6/2005 was filed by the bank before the Debts Recovery Tribunal under S.19 read with S.31A of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as “the RDDBFI Act”), for the issuance of a Recovery Certificate in terms of the decree. It would appear that by 23.11.2004, the date of filing the said O.A., the decree amount had already swelled to Rs. 18,03,552/-. The Debts Recovery Tribunal passed the final order in O.A.No.6/2005 on 10.6.2005, directing the issuance of a Recovery Certificate in terms of the decree in O.S.No.39/1999 of the Sub Court, Ernakulam for recovery of the sum of Rs. 18,03,552/- with interest on the sum of Rs. 17,75,815.50 @ 20.75% per annum with quarterly rests from 23.11.2004 till realisation from the defendants personally and by the sale of decree ‘A’ schedule property. The applicant bank was also allowed to recover its costs from the defendants and by sale of decree ‘A’ schedule property. The Recovery Certificate subsequently issued on 9.9.2005 quantifies the total amount due from the 6th and 7th respondents as Rs. 20,14,044.52.
4. It is for recovery of the said amount, and the interest accrued thereon, that a sale proclamation was issued by the Recovery Officer of the DRT on 28.10.2013. Immediately thereafter, the 6th and 7th respondents filed O.P.(DRT).No.4444/2013 challenging the sale proclamation. By a judgment dated 16.12.2013, this Court dismissed the said O.P.(DRT), and relegated the parties to the alternate remedy of filing an appeal before the Debts Recovery Appellate Tribunal (DRAT). For reasons best known to the said respondents, they chose not to prefer the Appeal.
5. The property was thereafter sold on 24.2.2014 to Sri. Ratheesh M.N., the petitioner in W.P.(C).No.30651/2017. When faced with the situation where steps were being taken for delivery of possession to the auction purchaser, the defaulting respondents approached this Court through W.P.(C).No.15366/2015, which was dismissed by a learned Single Judge referring to the earlier judgment of this Court in O.P.(DRT).No.4444/2013, and observing that their remedy lay in pursuing a statutory appeal before the DRAT. With
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