Partly allowed

Jerome, S/O.Augustine v. the Authorized Office, Coastal Urban Co-

Kerala HC18 Aug 2014WP(C)/19357/2010

Case brief

AI extract

What is this about?

The Court disposed of three writ petitions challenging bank possession proceedings involving mortgaged property. It directed parties to deposit amountable shares of dues in proportion to property extents; upon full deposit, the Bank must release mortgages. Individual title disputes remain subject to pending civil suits.

What did the court decide?

Parties to deposit proportionate dues (Rs.6.75L, 13L, 19.75L); Bank to release mortgage only upon full deposit; title disputes remain subject to pending suits.

Jerome, S/O.Augustine Vs the Authorized Office, Coastal… — Banking and Recovery | Kerala HC (2014)

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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 K.VINOD CHANDRAN

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MONDAY, THE 18TH DAY OF AUGUST 2014/27TH SRAVANA, 1936

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WP(C).No. 19357 of 2010 (T)

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PETITIONER(S) :

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JEROME, S/O.AUGUSTINE KINATTUMMOOTTIL, MEENATHCHERRY, SAKTHIKULANGARA, KOLLAM.

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BY ADVS.SRI.VARGHESE C.KURIAKOSE

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SRI.P.J.JOSE

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RESPONDENT(S):

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1. THE AUTHORIZED OFFICE, COASTAL URBAN CO-OPERATIVE BANK LTD.NO.3036, KOLLAM-691 581.

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2. THOMAS BABU, S/O.PETER THOMAS, IMMANUEL VEEDU, KANNIMEALCHERRY, SAKTHIKULANGARA, KOLLAM-691 581.

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ADDL.R3. & ADDL. R4 IMPLEADED

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3. SRI.PETER BENNY KANDACHEZHATHU HOUSE, KAVANADU.P.O., KOLLAM- 691 003.

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4. RANI BENNY, KANDACHEZHATHU HOUSE, KAVANADU.P.O., KOLLAM- 691 003.

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ADDL. R3 AND R4 ARE IMPLEADED AS PER ORDER DATED 23/02/2012 IN IA NO. 2617/12.

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R2 BY ADV. SMT.T.S.MAYA (THIYADIL) R2 BY ADV. SMT.PRINCY XAVIER R1 BY ADV. SRI.P.R.PREMACHANDREN R3 & R4 BY ADV. SRI.V.V.RAJA R3 & R4 BY ADV. SRI.M.T.SURESHKUMAR

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 18-08-2014, ALONG WITH WPC. 14111/2014, WPC. 20633/2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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AMV

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: 2 :

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WP(C).No. 19357 of 2010 (T)

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APPENDIX

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PETITIONER(S) EXHIBITS :

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EXT.P1 : COPY OF SALE DEE NO.551/2001, DATED 09.02.2001 OF KOLLAM SRO EXECUTED IN FAVOUR OF 2ND RESPONDENT. EXT.P2 : COPY OF AGREEMENT FOR SALE DATED 08.05.2006 ENTERED INTO BETWEEN THE PETITIONER AND 2ND RESPONDENT. EXT.P3 : COPY OF PLAINT IN O.S.NO.56/2007 FILED BEFORE THE SUB COURT, KOLLAM. EXT.P4 : COPY OF RECEIPT SHOWING PAYMENT OF RS.8,000/- TO THE 1ST RESPONDENT BANK. EXT.P5 : COPY OF POSSESSION NOTICE ISSUED BY THE 1ST RESPONDENT BANK TO THE VENDOR OF 2ND RESPONDENT.

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RESPONDENTS EXHIBITS :

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EXT.R3(A) : COPY OF THE PLAINT IN O.S.NO.713 OF 2010 ON THE FILE OF THE SUBORDINATE JUDGE, KOLLAM. EXT.R3(B) : COPY OF THE AMENDED WRITTEN STATEMENT FILED BY THE ANSWERING RESPONDENTS TO O.S.NO.56 OF 2007 PREFERRED BY THE PETITIONER. EXT.R3(C) : COPY OF THE REPRESENTATION SUBMITTED BY THE ADDITIONAL RESPONDENTS NO.3 AND 4 BEFORE THE 1ST RESPONDENT BANK. EXT.R3(D) : COPY OF THE ACCOUNT STATEMENT IN THE NAME OF THE SNEHA SOLTER AND SAJIN BENNY.

/TRUE COPY/

P.A.TO JUDGE

AMV

K.VINOD CHANDRAN, J.

W.P.(C) Nos. 19357 of 2010, 14111 of 2014 & 20633 of 2014

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Dated this the 18^th day of August, 2014

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JUDGMENT

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These three writ petitions are disposed of by a

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common order.

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2.The parties are referred to by their names. Peter

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Benny and Rani Benny, who are the respondents 3 and 4 in W.P.(C) No.19357 of 2010 availed a loan from the first respondent Bank mortgaging 30 cents of immovable property covered by two separate title deeds, one of 25 cents and another of 5 cents. Subsequent to the mortgage, out of the 25 cents, 15 cents was sold to one Thomas Babu, the petitioner in W.P.(C) No.20633 of 2014, who is said to have entered into an agreement for sale, with Jerome, the petitioner in W.P.(C) No.19357 of 2010. Peter Benny and Rani Benny also sold the balance 10

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W.P.(C) Nos. 19357/10, 14111/14 & 20633/14

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cents comprised in the 25 cents covered by one title deed to one Sylendra Kumar, who entered into a subsequent sale deed with Franko, the petitioner in W.P.(C) No.14111 of 2014; who incidentally is the son of Jerome.

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3.With respect to the 10 cents purchased by Franko, it is also submitted that there was a mortgage with Indian Bank, created by Sylendra Kumar the vendor of Franko; which was settled by Franko to clear the defect in title. The subsequent purchasers of Peter Benny and Rani Benny were, in the dark about the mortgage created to the respondent Bank herein, which was revealed only, when possession notice was issued with respect to the properties.

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4.Subsequent to the mortgage, the mortgagors being Peter Benny and Rani Benny are said to have colluded with a Bank official and obtained release of

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W.P.(C) Nos. 19357/10, 14111/14 & 20633/14

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the title deed pertaining to 25 cents of property mortgaged; without satisfying the debt. The respondent Bank hence initiated criminal proceedings against its own officer as also the mortgagors. When an enquiry was commenced, subsequent vendees were also questioned and only at that point, the earlier mortgage was revealed to the said vendees.

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5.W.P.(C) No.19357 of 2010 was filed when possession notice was issued with respect to the 15 cents of property for purchase of which, Jerome is said to have entered into an agreement with Thomas Babu.

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6.W.P.(C) 14111 of 2014 was initiated by Franko again challenging the possession proceedings initiated against the 10 cents of property and expressing willingness to settle the proportionate liability that would fall on the said property.

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W.P.(C) Nos. 19357/10, 14111/14 & 20633/14

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7.W.P.(C) No.20633 of 2014 has been filed by Thomas

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Babu, who is said to be the owner of 15 cents having obtained the same from Peter Benny and Rani Benny and who is also said to have entered into an agreement with Jerome.

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8.Suits are said to be pending between the parties. Peter Benny and Rani Benny now disown all the subsequent transactions. Thomas Babu asserts his right on the 15 cents and declines conveyance to Jerome. Franko would seek to maintain his interest in the 10 cents of property. However, all such interests individually agitated by the parties are subservient to the mortgage created in favour of the respondent Bank. In such circumstance, the respondent Bank would have to be granted the right to proceed against the mortgaged property for realisation of the debts due to it.

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W.P.(C) Nos. 19357/10, 14111/14 & 20633/14

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9.However, the learned counsel appearing for the individual parties, would contend before this Court that, they are willing to pay their proportionate share of the liability with reference to the claims raised on each of the said property. But, however, subject to the finality in the civil proceedings; said to have been initiated by the respective parties. The writ petition hence can be disposed of reserving the right of the Bank to proceed against the mortgaged property, but with the following directions.

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10.Out of the 30 cents of property admittedly mortgaged by the original owners, with the first respondent Bank; 5 cents, which is covered by a separate title deed, which even now is with the respondent Bank is claimed only by Peter Benny and Rani Benny. Thomas Babu on the basis of a sale deed asserts his right on 15 cents and Franko asserts his right on 10 cents of property both

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W.P.(C) Nos. 19357/10, 14111/14 & 20633/14

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together constituting the 25 cents; the title deed of which was clandestinely removed from the possession of the respondent Bank. Though, different extents of property, they lie contiguous to each other and hence would be valued at the very same price. The liability of Peter Benny and Rani Benny together and Franko and Thomas Babu would be in the proportion of 1:2:3, the extents being in the proportion 5:10:15.

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11.The respondent Bank has filed a statement as per the direction of this Court contending that as on 31.07.2014 there is an amount of `39,33,670/remaining due and payable in the loan account. In the light of the specific undertaking made by the parties through counsel, the Banks liability would be settled by the respective parties claiming right over the different properties. In the context of the proportion as indicated above, the total liability,

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W.P.(C) Nos. 19357/10, 14111/14 & 20633/14

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which is tentatively fixed at `40,50,000/- would be settled by all the parties in proportion to their respective liability, which liability is with reference to the extent of the property on which they raise their claims.

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12.Peter Benny and Rani Benny shall pay an amount of 6,75,000/- which would be relatable to the 5 cents on which they raise a claim. Franko shall pay an amount of 13,00,000/- as against the 10 cents on which he raises a claim. Thomas Babu shall pay an amount of `19,75,000/- with respect to the 15 cents claimed by him. On such payment being made, the Bank shall release the mortgage on all the properties and the individual claims raised by the parties as against each other shall be subject to the final decision in the suits pending or filed between the respective parties. The amounts so directed shall be deposited within 45 days from

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W.P.(C) Nos. 19357/10, 14111/14 & 20633/14

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today.

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13.It is made clear that only on all the parties making the entire deposit, the Bank would be liable to release the mortgage. If one party fails, necessarily the Bank would be reserved its right to proceed against that property under law and also be entitled to revive the proceedings under the SARFAESI Act. However, the question of release of the properties in which deposit has been made would be left to the Bank's discretion, which would have to be exercised in favour of the depositor; if such money is adjusted to the loan account.

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14.The learned counsel for the respondent Bank would also contend that, even on release of the mortgage, the respondent Bank would not be able to return the documents pertaining to 25 cents, since admittedly it is not in the possession of the respondent Bank.

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W.P.(C) Nos. 19357/10, 14111/14 & 20633/14

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With respect to the title deeds of 5 cents that definitely can be returned to Peter Benny and Rani Benny since no other parties raise a claim on that. The individual parties in the W.P.(C)'s concede to this fact. It is made clear that on release of the mortgage, the consequent title with respect to each of the said properties shall be subject to the adjudication of disputes pending between the parties.

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All the three writ petitions stand disposed of, with the above directions.

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Sd/K.VINOD CHANDRAN, JUDGE

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AMV/22/08/

Jerome, S/O.Augustine v. the Authorized Office, Coastal Urban Co-

Case brief

What is this about?

What did the court decide?

Jerome, S/O.Augustine v. the Authorized Office, Coastal Urban Co-

Case brief

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What did the court decide?

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