Allowed

Kuriakose v. Union Bank of India

Kerala HC4 Jul 2016WP(C)/21986/2016

Case brief

AI extract

What is this about?

In a writ petition under the SARFAESI Act, the High Court of Kerala deferred an imminent public auction of a mortgaged property by three months. The court observed a discrepancy between the debt amount and the property's valuation, allowing the petitioner time to settle the liability to avoid the forced sale.

What did the court decide?

The respondent Bank shall defer the sale of the property proclaimed for holding on 08.07.2016 for a period of three months to enable the petitioner to discharge the entire liability.

Kuriakose Vs Union Bank of India — Banking and Recovery | Kerala HC (2016)

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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 A.M.SHAFFIQUE

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MONDAY, THE 4TH DAY OF JULY 2016/13TH ASHADHA, 1938

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WP(C).No. 21986 of 2016 (W)

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PETITIONER:

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KURIAKOSE, AGED 74, S/O LATE EDAVANTHALA KURIAKOSE, EDAVANTHALA HOUSE, PUTHANANGADI, KOTTAYAM P.O.,PIN- 686 001

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BY ADVS.SMT.T.S.MAYA (THIYADIL) SMT.K.A.SUNITHA

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RESPONDENT(S):

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1.UNION BANK OF INDIA, REP. BY BRANCH MANAGER, NUGAMPADOM BRANCH, KOTTAYAM - 686 005.

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2.AUTHORISED OFFICER, CHIEF MANAGER, UNION BANK OF INDIA, REGIONAL OFFICE, ZAC COMPLEX KODIMATHA, KOTTAYAM - 686 005.

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BY SRI.A.S.P.KURUP, SC

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04-07-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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mbr/

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WP(C).No. 21986 of 2016 (W)

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APPENDIX

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PETITIONER(S)' EXHIBITS:

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P1 : COPY OF VALUATION SURVEY REPORT FILED BY DR.VIVISH THOMAS IN 2-3-11 (DATE OF INSPECTION IS

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11-2-09)

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P2 : COPY OF VALUATION SURVEY REPORT FILED BY SBI SURVEYOR IN 5-12-11(DATE OF INSPECTION IS 29-10-12)

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P3 : COPY OF STATEMENT OF ACCOUNTS ISSUED BY THE RESPONDENTS.

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P4 : COPY OF E-AUCTION SALE NOTICE DATED 12-5-2016. P5 : COPY OF THE PETITION FILED BY THE PETITIONER BEFORE THE RESPONDENT DATED 18-06-2016.

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RESPONDENT(S)' EXHIBITS: NIL

//TRUE COPY//

P.S. TO JUDGE

mbr/

A.M.SHAFFIQUE, J.

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W.P.(C).No.21986 of 2016

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-----------------------------------

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Dated this the 4^th day of July, 2016

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J U D G M E N T

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This writ petition is filed for the second time when proceedings were taken by the respondent Bank under the SARFAESI Act.

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The petitioner is one of the partners of a firm which had availed of a financial facility from the respondent Bank for construction of a star hotel. The building has been completed and in the meantime on account of the new Abkari Policy, the grant of licence to star hotels had been restricted, by which the petitioner was unable to utilise the building for the intended purpose. This caused huge liability on the firm and it became a defaulter to the Bank.

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Earlier another partner had approached this Court by filing W.P.(C).No.3677 of 2016 which was disposed of by judgment dated 01.02.2016. By the said judgment, this Court observed that the total outstanding in respect of the loan account was 1,10,00,000/-₹ together with accrued interest. The petitioner was permitted to discharge the liability in six equal monthly instalments starting from 15.02.2016. It is stated that after the disposal of the case, the petitioner had remitted 10 lakhs. Further it is submitted that, the₹ Bank has now proclaimed the property for sale to be held on

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W.P.(C).No.21986 of 2016

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08.07.2016 by fixing the reserve price at 3 Crores. According to₹ the petitioner, the property is having an extent of 45 cents along with a building having an area of 26,700 sq. feet and even as per the valuation of the Bank, it will fetch more than 13 Crores. It is₹ stated that the petitioner had identified a purchaser who was willing to purchase the property at a much higher price and in the meantime, since the notice was published for sale of property, the purchaser had intimated certain reservations for going ahead with the purchase of the property. Learned counsel submits that if time is granted, the entire liability will be settled by effecting a private sale of the property with the consent of the Bank, so that the Bank's liability can be settled. It is stated that as per Ext.P3 statement dated 07.01.2016, the total outstanding is 46,69,253/-. However,₹ it is stated that the details of interest accrued and payable by the customer will be collected separately.

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Learned counsel appearing on behalf of the respondent Bank submits that the total amount presently due will come to ₹1,02,81,178/- as on 01.05.2016 and the said amount along with interest and other expenses has to be realised. As rightly contended by the learned counsel for the respondent, once another partner of the firm had approached this Court and had obtained instalment facility to repay the loan amount, there cannot be a second opportunity being granted by this Court. But the learned counsel for

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W.P.(C).No.21986 of 2016

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the petitioner submits that they have been forced to approach this Court by filing this writ petition on account of the publication of the notice for sale of property at a very low price. In fact, valuation is a matter to be objected by the owner of the property. However, it is settled position of law that the sale shall not be deferred merely for the reason that there is undervaluation. If at all there is undervaluation, it is a matter to be taken up at a later stage, while seeking for setting aside the sale.

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But, one aspect which requires a re-look into the matter is with reference to the total amount due and the reserve price of the property. The reserve price fixed for the property as per Ext.P4 is ₹3,04,87,000/- and the total debt due is only 1,02,81,178/-. The₹ amount due to the Bank is almost 1/3^rd of the value of the property. In such circumstances, when the petitioner is offering to pay the entire amount even by bringing a proper purchaser, it would be appropriate for the Bank to give some more time to enable the petitioner to discharge the liability.

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Therefore, despite the petitioner approaching this Court for the second time, since there is a further cause of action in the matter, and taking into consideration the aforesaid factual circumstances, I am of the view that some time can be granted to the petitioner to discharge the liability.

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Accordingly, this writ petition is disposed of as under :

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W.P.(C).No.21986 of 2016

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The respondent Bank shall defer the sale which is proclaimed to be held on 08.07.2016, for a period of three months to enable the petitioner to discharge the entire liability due to the Bank.

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If the liability is not settled within the aforesaid three months, it shall be open for the respondent Bank to take appropriate steps in accordance with law.

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Sd/-

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A.M.SHAFFIQUE, JUDGE.

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Kuriakose v. Union Bank of India

Case brief

What is this about?

What did the court decide?

Kuriakose v. Union Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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