Allowed

Jose Joseph v. the District Collector

Kerala HC24 Sept 2012WP(C)/17336/2012

Case brief

AI extract

What is this about?

Writ petitioner challenged attachment of non-mortgaged property for loan default. Court held recovery from non-mortgaged assets was premature as the mortgaged property was not first pursued to realization. Court directed respondents to proceed against mortgaged property first.

What did the court decide?

Respondents directed to proceed against the mortgaged property first; permitted to attach other properties to prevent alienation.

Jose Joseph Vs the District Collector — Land Acquisition | Kerala HC (2012)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE ANTONY DOMINIC

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MONDAY, THE 24TH DAY OF SEPTEMBER 2012/2ND ASWINA 1934

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WP(C).No. 17336 of 2012 (N)

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PETITIONER(S):

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JOSE JOSEPH,, AGED 43 YEARS PITTAPPILLIL HOUSE,KADAVOOR.P.O,POTHANIKKAD ERNAKULAM DISTRICT.

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BY ADVS.SRI.SUMAN CHAKRAVARTHY SRI.MARTINDAS V.JAMES (VATTAKKUZHIYIL)

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RESPONDENT(S):

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1. THE DISTRICT COLLECTOR, ERNAKULAM DISTRICT-682030.

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2. THE TAHSILDAR, KOTHAMANGALAM-686691.

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3. THE KERALA STATE HOUSING BOARD, REPRESENTED BY ITS ASSISTANT SECRETARY BRANCH OFFICE,KOTHAMANGALAM-686691.

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BY ADV. SRI.GEORGE BOBAN, SC, K.S.H.B. FOR R3 BY SR. GOVERNMENT PLEADER SMT. P.A. REZIYA

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 24-09-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C).No. 17336 of 2012 (N)

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APPENDIX

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PETITIONER(S) EXHIBITS:

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EXT-P1 A TRUE COPY OF THE MORTGATE DEED DTD.19.03.1998 EXT-P2 A TRUE COPY of the PROCEEDINGS DATED 16.6.2001. EXT-P3 A TRUE COPY OF THE DEMAND NOTICE DATED 30.07.01. EXT-P4 A TRUE COPY OF THE RECIEPT DATED 1/11/01. EXT-P5 A TRUE COPY OF THE JUDGMENT DATED 27.07.2010. EXT-P6 A TRUE COPY OF THE OTS APPLICATION DATED 27.09.2010. EXT-P7 A TRUE COPY OF THE DEMAND NOTICE DATED 2/12 EXT-P8 A TRUE COPY OF the REPRESENTATION DATED 25.06.2012.

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RESPONDENTS' EXHIBITS: NIL

//TRUE COPY//

P.A. TO JUDGE

ANTONY DOMINIC, J.

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W.P.(C) NO.17336 OF 2012(N)

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Dated this the 24^th day of September, 2012

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J U D G M E N T

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Petitioner availed of a loan of Rs.5,00,000/- from the 3^rd respondent for the construction of a house in 10 cents of his land comprised in Sy.No.868/1B/2 of Kadavoor Village, Kothamangalam. The loan was sanctioned, property was mortgaged and according to the petitioner, availing of the loan building was also constructed. However, it appears that the default committed led to initiation of recovery proceedings and now the revenue authorities are proceeding against the property of the petitioner other than the one mortgaged in favour of the 3^rd respondent. It is contending that the said recovery proceedings initiated against the property which is not mortgaged in favour of the 3^rd respondent and that too when a mortgage is in force is illegal, the writ petition has been filed.

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On behalf of respondents 1 and 2 a statement has been filed and in paragraph 3 it is stated thus;

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“Thereafter notice of attachment of immovable property under Section 36 of Revenue Recovery Act was issued on 10 cents of land comprised in Sy. No.868/1B2 (T.P.No.6937) in Kadavoor Village owned by the petitioner

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WPC.No. 17336/2012

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and mortgaged to the third respondent. On further enquiry, Village Officer reported that the house constructed using the loan amount is situated in 2 acres of land comprised in Sy. No.867/2-4 which is in the name of Advocate Thampy Joseph who is the brother of the petitioner. The mortgaged 10 cents of land in Sy.868/1B2 does not have house in that. As the mortgaged land does not have any demarcation with the rest of the land, the Village Officer found difficult to locate the mortgaged land. Later, Village Officer prepared a sketch of the 10 cents of the land as shown by Advocate Thampy Joseph. The Village Officer reported that the attachment of that land would not be sufficient to recover the defaulted amount. Hence, notice under Section 34 was issued to the defaulters land at Mannarkkad Taluk, Karakkurissy Village.”

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Counter affidavit filed by the 3^rd respondent also contains the averment to the aforesaid effect. A reply affidavit has been filed by the petitioner. Along with the reply affidavit, he has produced Exts.P9 tax receipt and Ext.P10 NOC issued by the Panchayat for construction of a house in the mortgaged property. He has also produced Ext.P11 a location certificate and Exts.P12 and P13 certificates issued by the Village Officer, which also show that a house has been constructed in the land in question.

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Although the document produced by the petitioner indicates that the property mortgaged as per Ext.P1 contains a house, which

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WPC.No. 17336/2012

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according to the petitioner was constructed utilising the loan availed of from the 3^rd respondent. However, averments contained in the statement filed by the respondents 1 and 2 and the counter affidavit filed by the 3^rd respondent show that house was constructed by the petitioner in a property other than the ten cents mortgaged to the 3^rd respondent. This being a disputed question of fact it is not possible for this court to finally pronounce on this factual issue.

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Be that as it may, admittedly, the property covered by Ext.P1 has been mortgaged in favour of the 3^rd respondent. The statement filed by the respondents 1 and 2 indicate that the mortgaged property has also been identified by the Village Officer. Despite such identification, the reason stated for proceeding against the petitioner's property in Mannarkkad District is the insufficiency of the mortgaged property to realize the debt due.

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In my view, when a property is mortgaged and the mortgagor has committed default, the mortgagee should first proceed against the mortgaged property and then proceed against the other assets, in the event the mortgaged property is insufficient to realise the debt. In this case, the mortgaged asset has not been proceeded

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WPC.No. 17336/2012

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against so far and the other assets of the petitioner are proceeded against, on the mere assertion that the mortgaged asset is insufficient to realise the debt. Such a proceeding initiated against the other assets of the petitioner, in the facts of this case, is premature and should be resorted to, only if it is found that the on sale of the mortgaged asset, the debt cannot be realised.

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Therefore, I dispose of this writ petition with the following directions.

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i. That the respondents will proceed against the mortgaged property covered by Ext.P1.

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ii. They shall be free to proceed against the other assets of the petitioner including the property mentioned in Ext,.P7 notice issued under Section 34 of the Revenue Recovery Act, in the event the sale proceeds from the mortgaged property are insufficient to meet the liability or they are unable to proceed against the mortgaged property for any reason.

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Iii. It is made clear that in the meanwhile to safeguard the interest of the respondents, it is also to open to them to attach the

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WPC.No. 17336/2012

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property covered by Ext.P3, so that the petitioner will not alienate or

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encumber the same.

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(ANTONY DOMINIC) JUDGE

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vi/

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WPC.No. 17336/2012

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Jose Joseph v. the District Collector

Case brief

What is this about?

What did the court decide?

Jose Joseph v. the District Collector

Case brief

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