Dismissed

Hafiz Mohammed Shuhaib v. the Special Sale Officer/Arbitrator

Kerala HC17 Dec 2018WP(C)/34619/2018

Case brief

AI extract

What is this about?

In this writ petition challenging a bank's recovery proceedings after an arbitration award, the High Court dismissed the petition. It held the petitioner abused writ jurisdiction by suppressing material facts to secure interim relief and was a chronic defaulter.

What did the court decide?

Petitioner ordered to pay Rs. 25,000 as costs to the Chief Minister's Distress Relief Fund.

Hafiz Mohammed Shuhaib Vs the Special Sale… — Banking and Recovery | Kerala HC (2018)

¶1

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶2

PRESENT

¶3

THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN

¶4

MONDAY ,THE 17TH DAY OF DECEMBER 2018 / 26TH AGRAHAYANA, 1940

¶5

WP(C).No. 34619 of 2018

¶6

PETITIONER:

¶7

HAFIZ MOHAMMED SHUHAIB AGED 48 YEARS S/O. MOHAMMEDKUTTY, PALATHINGAL VALIYA PEEDIEKKAL, P.O ULLANAM, PARAPPANANGADI, MALAPPURAM DISTRICT, PIN 673303.

¶8

BY ADVS. SRI.K.P.SUDHEER SMT.ANJALI NAIR

¶9

RESPONDENTS:

¶10

1 THE SPECIAL SALE OFFICER/ARBITRATOR SERVICE CO-OPERATIVE BANK LIMITED NO. F.583, ABDURAHIMAN NAGAR, OFFICE OF THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES, TIRURANGADI, MALAPPURAM DISTRICT, PIN 676306

¶11

2 ABDURAHIMAN NAGAR SERVICE CO-OPERATIVE BANK LTD NO.F.583, ABDU RAHIMAN NAGAR, MALAPPURAM DISTRICT- 676306

¶12

BY ADVS. GOVERNMENT PLEADER SRI.B.S.SWATHY KUMAR SMT.ANITHA RAVINDRAN

¶13

THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 17.12.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶14

WP(C).No. 34619 of 2018

¶15

¶16

JUDGMENT

¶17

The petitioner, who is a 'B' class PWD

¶18

Contractor, who availed a loan for Rs.10,00,000/from the 2^nd respondent Bank in the year 2004 (wrongly stated as 2009 in the writ petition) by

¶19

mortgaging his residential property having an extent of 80.637 cents in Re-survey No.294/5B of Ullanam Amsom Desom, has filed this writ petition under Article 226 of the Constitution of India,

¶20

seeking a writ of certiorari to quash Ext.P1 demand notice dated 06.10.2018 issued by the 1^st respondent

¶21

Special Sale Officer/Arbitrator and Ext.P2

¶22

execution petition filed by the 2^nd respondent Bank in order to execute the award dated 28.05.2010 passed by the 1^st respondent in ARC No.1744 of 2009.

¶23

The petitioner has also sought for a writ of

¶24

mandamus commanding the respondents to consider the request made in Ext.P3 objection dated 15.10.2018 and to grant him sufficient time to pay the decree

¶25

debt after waiving the penal interest and other

¶26

WP(C).No. 34619 of 2018

¶27

¶28

charges. The further relief sought for is an order

¶29

directing the 2^nd respondent Bank to waive penal interest and grant sufficient time to pay the

¶30

decree debt.

¶31

On 24.10.2018, when this writ petition came up for admission, this Court issued urgent notice on admission by speed post to respondents 1 and 2 returnable within three weeks. This Court granted an interim stay of recovery proceedings pursuant to Ext.P1 demand notice for a period of one month, on condition that the petitioner deposits with the 2^nd respondent a sum of Rs.1,00,000 within two weeks and a further sum of Rs.1,00,000/- within two weeks, thereafter.

¶32

On 23.11.2018, when this writ petition came

¶33

up for consideration, this Court passed the following order;

¶34

“From the submissions made by the learned counsel for the petitioner and also the learned counsel for the 2^nd respondent Bank, it is seen that the petitioner, who is a 'B' class PWD Contractor, who availed a loan for Rs.10,00,000/- from the

¶35

WP(C).No. 34619 of 2018

¶36

¶37

2^nd respondent Bank in the year 2009, has not chosen to make even a single remittance for the last 9 years, other than the payment of Rs.2,00,000/- made in terms of the interim order of this Court dated 24.10.2018. The fact that, as on the date of filing of this writ petition, the petitioner has not made even a single repayment is not disclosed in the writ petition.

¶38

The petitioner to file an affidavit explaining the facts and circumstances.

¶39

The Secretary of the 2^nd respondent Bank shall also file a counter affidavit explaining the steps taken to recover the amount due from the petitioner, after securing an award in A.R.C.No.1744 of 2009 dated 28.05.2010.”

¶40

A counter affidavit has been filed by the

¶41

2^nd respondent Bank opposing the reliefs sought for in this writ petition. The petitioner has also filed a reply affidavit.

¶42

Heard the learned counsel for the

¶43

petitioner and also the learned counsel for the 2^nd respondent Bank. Despite service of notice, none

¶44

appears for the 1^st respondent Special Sale

¶45

Officer/Arbitrator.

¶46

The petitioner, who is a 'B' Class PWD

¶47

WP(C).No. 34619 of 2018

¶48

¶49

Contractor, who availed a loan for Rs.10,00,000/from the 2^nd respondent Bank in the year 2004, has filed this writ petition with an averment that he

¶50

failed to remit the loan amount and the 2^nd respondent initiated proceedings under Section 69 of the Kerala Co-operative Societies Act, 1969 by filing A.R.C.No.1744 of 2009. He has not received any notice in the arbitration proceedings. He came to know about the award passed by the Arbitrator only on receipt of Ext.P1 demand notice dated 06.10.2018. On receipt of Ext.P1 demand notice and Ext.P2 execution petition he came to know that the 2^nd respondent Bank has secured an award for a sum of Rs.29,34,675/-, out of which Rs.19,32,851/represents the interest charged by the Bank. On receipt of Ext.P1 demand notice and Ext.P2 Execution Petition, he submitted Ext.P3 objection and thereafter, moved this Court in this writ petition seeking various reliefs.

¶51

A counter affidavit has been filed by the

¶52

WP(C).No. 34619 of 2018

¶53

¶54

2^nd respondent Bank, wherein it has been stated that

¶55

the recovery proceedings initiated against the petitioner, based on Ext.P1 demand notice and

¶56

Ext.P2 Execution Petition, relates to the recovery

¶57

of the dues in respect of loan account No.NAMT 1696/2004, which was availed by the petitioner in the year 2004, and not in the year 2009, as stated in the writ petition. The loan was sanctioned for business purpose and house construction. A sum of Rs.10,00,000/- was sanctioned based on Ext.R2(a) loan application dated 24.09.2004 made by the petitioner, offering as security his property having an extent of 80.637 cents in Sy.No.294/5B of Neduva Village in Thirurangadi Taluk. Ext.R2(b) is

¶58

the NAMT voucher dated 04.10.2004 evidencing disbursement of the loan amount of Rs.10,00,000/to the petitioner.

¶59

In the counter affidavit filed by the 2^nd

¶60

respondent Bank, it has also been stated that,

¶61

after availing the loan, the petitioner had

¶62

WP(C).No. 34619 of 2018

¶63

¶64

constructed a palatial residential building and he is having extensive properties and other assets from which, he can raise money to repay the loan. As there was no repayment in the loan account, the 2^nd respondent Bank issued demand notices. However, he did not respond. In such circumstances, in the year 2009, the 2^nd respondent Bank filed ARC.No.1744 of 2009 before the 1^st respondent Arbitrator and obtained Ext.R2(c) award dated 28.05.2010, under Section 70 of the Kerala Co-operative Societies Act. The notice in the arbitral proceedings as well as the copy of the award were sent to the petitioner in time. However, instead of taking steps to repay the amount, the petitioner approached the Kerala Co-operative Tribunal, Thiruvananthapuram in R.P.No.23 of 2011, invoking Section 84 of the Kerala Co-operative Societies Act. Ext.R2(d) is a copy of the notice received by the 2^nd respondent Bank in R.P.No.23 of 2011 filed by the petitioner. The said revision petition ended

¶65

WP(C).No. 34619 of 2018

¶66

¶67

in dismissal, thereby confirming Ext.R2(c) award

¶68

passed by the Arbitrator.

¶69

In the counter affidavit, the 2^nd respondent

¶70

Bank has also stated that in the year 2009, the

¶71

petitioner made a request before the then Minister

¶72

for Co-operation seeking benefit of One Time Settlement Scheme to pay off the amounts due under the loan account in question. The same was forwarded to the Joint Registrar of Co-operative Societies, Malappuram, who, vide communication No.C.R.P.(2)5931/09 dated 30.10.2009 directed the 2^nd respondent Bank to intimate the concessions and

¶73

deductions that can be made in the due amount.

¶74

Accordingly, the 2^nd respondent Bank gave a reply on

¶75

17.11.2018, making it clear that, though the petitioner is capable of repaying the amount outstanding within a short time, the Bank is

¶76

willing to forgo the penal interest, if he comes

¶77

forward to settle the loan under One Time Settlement Scheme. Still, the petitioner did not

¶78

WP(C).No. 34619 of 2018

¶79

¶80

pay any amount, forcing the Bank to resort to

¶81

arbitration proceedings, which culminated in Ext.R2(c) award, which the petitioner himself challenged before the statutory forum. Therefore, the contention of the 2^nd respondent Bank is that

¶82

the petitioner was fully aware of the steps initiated by the Bank to recover the loan amount, and agreeing to give maximum possible concessions and deductions under One Time Settlement Scheme.

¶83

However, he failed to avail that benefit. It is concealing all these facts that the petitioner has filed this writ petition stating that the loan is availed in the year 2009 and pleading ignorance of the proceedings initiated by the Bank to recover the loan amount.

¶84

A reply affidavit has been filed by the

¶85

petitioner, wherein it has been stated that he was under the bona fide impression that the loan in

¶86

question was availed in the year 2009. Only on receipt of the counter affidavit, he realised that

¶87

WP(C).No. 34619 of 2018

¶88

¶89

it was availed in the year 2004. According to the

¶90

petitioner, he renovated the existing house much prior to 2004. He has not utilised the loan amount for his personal use and the loan was availed to help his friend Mithinutty. The revision petition referred to in Ext.R2(d) notice produced along with the counter affidavit filed by the 2^nd respondent Bank is one filed at the instance of his friend, Mithinutty and the petitioner was not aware of the said proceedings. In the reply affidavit, the petitioner has also stated that he did not remember any request made to the Minister for Co-operation, as averred in paragraph 4 of the counter affidavit. Therefore, the stand taken by the petitioner in the reply affidavit is that he has not suppressed or concealed any fact from the notice of this Court and since he has complied with the conditional order passed by this Court, he is entitled for grant of sufficient time to pay off the dues.

¶91

Having considered the submissions made by

¶92

WP(C).No. 34619 of 2018

¶93

¶94

the learned counsel on both sides and also the

¶95

pleadings and materials on record, this Court finds

¶96

that, as can be seen from Ext.R2(a) loan application, the loan in question is one availed by

¶97

the petitioner in the year 2004 for the purpose of construction of house and for business. It was based on the said application that the petitioner was sanctioned with a loan for Rs.10,00,000/-, on the security of his property having an extent of 80.637 cents in Re-survey No.294/5B of Ullanam Amsom Desom. The loan amount was disbursed to the petitioner on 04.10.2004, as evident from Ext.R2(b) NAMT voucher. The fact that, after availing the loan for Rs.10,00,000/- in the year 2004, the

¶98

petitioner has not made even a single repayment, is

¶99

not disputed in the reply affidavit filed by the petitioner. The stand taken by the petitioner in the reply affidavit is that he was under the bona

¶100

fide impression that his friend Mithinutty was making proper remittance. The petitioner has no

¶101

WP(C).No. 34619 of 2018

¶102

¶103

such case in the writ petition, going by the

¶104

averment in paragraph 2 of the writ petition.

¶105

The petitioner, who is the borrower in loan

¶106

account No.NAMT 1696/2004, who was disbursed with

¶107

the loan amount of Rs.10,00,000/- on 04.10.2004, as evidenced by Ext.R2(b) voucher, has not chosen to make any remittance whatsoever except the payment of Rs.2,00,000/- made in terms of the interim order of this Court dated 24.10.2018. The fact that the petitioner is a chronic defaulter, who has not made

¶108

any repayment after availing a loan for

¶109

Rs.10,00,000/- in the year 2004, even after the 2^nd respondent Bank secured Ext.R2(c) award dated 28.05.2010 in A.R.C.No.1744 of 2009, is not

¶110

disclosed in the writ petition. The petitioner, who

¶111

is a 'B' Class PWD Contractor, cannot plead ignorance of the transactions in the loan account,

¶112

after availing a loan for Rs.10,00,000/- from the 2^nd respondent Bank, in the year 2004. Now, in the

¶113

reply affidavit the petitioner has even taken a

¶114

WP(C).No. 34619 of 2018

¶115

¶116

contention that R.P.No.23 of 2011 filed before the

¶117

Kerala Co-operative Tribunal, Thiruvananthapuram challenging Ext.R2(c) award is one filed at the instance of his friend Mithinutty and not one filed by the petitioner.

¶118

The learned counsel for the petitioner

¶119

would submit that since the petitioner has made two remittance of Rs.1,00,000/- each, in terms of the interim order of this Court dated 24.10.2018, he may be permitted to pay off the entire dues covered

¶120

by the loan transaction in question in ten equal monthly instalments.

¶121

As already noticed, the interim order

¶122

referred to above dated 24.10.2018 is one secured

¶123

by the petitioner suppressing material facts from

¶124

the notice of this Court. In such circumstances, the fact that, in terms of the said interim order,

¶125

the petitioner has made two remittance of Rs.1,00,000/- each, will not entitle him to seek any discretionary relief from this Court, invoking

¶126

WP(C).No. 34619 of 2018

¶127

¶128

the extra ordinary jurisdiction under Article 226

¶129

of the Constitution of India. When the challenge made in R.P.No.23 of 2011 filed before the Kerala Co-operative Tribunal against Ext.R2(c) award passed by the Arbitrator in A.R.C.No.1744 of 2009 has already ended in dismissal, the petitioner cannot raise any legal or tenable challenge against Ext.P1 demand notice issued in Ext.P2 Execution

¶130

Petition.

¶131

In Prestige Lights Limited v. State Bank of India [(2007) 8 SCC 449], the Apex Court

¶132

reiterated that a prerogative remedy is not a matter of course. Therefore, in exercising extraordinary power, a writ court will indeed bear in mind the conduct of the party who is invoking such jurisdiction. If the applicant does not disclose full facts or suppresses relevant materials or is otherwise guilty of misleading the court, the court may dismiss the action without adjudicating the matter. The rule has been evolved

¶133

WP(C).No. 34619 of 2018

¶134

¶135

in larger public interest to deter unscrupulous

¶136

litigants from abusing the process of court by deceiving it. The very basis of the writ jurisdiction rests in disclosure of true, complete and correct facts. If the material facts are not candidly stated or are suppressed or are distorted, the very functioning of the writ courts would become impossible.

¶137

In Prestige Lights' case (supra) the Apex

¶138

Court held further that, under Article 226 of the Constitution of India, the High Court is exercising discretionary and extraordinary jurisdiction. Over

¶139

and above, a Court of Law is also a Court of Equity. It is, therefore, of utmost necessity that when a party approaches a High Court, he must place

¶140

all the facts before the Court without any reservation. If there is suppression of material facts on the part of the applicant or twisted facts have been placed before the court, the writ court may refuse to entertain the petition and dismiss it

¶141

WP(C).No. 34619 of 2018

¶142

¶143

without entering into merits of the matter. Paragraphs 33 and 34 of the said judgment read

¶144

thus:

¶145

“33.It is thus clear that though the appellantCompany had approached the High Court under Article 226 of the Constitution, it had not candidly stated all the facts to the Court. The High Court is exercising discretionary and extraordinary jurisdiction under Article 226 of the Constitution. Over and above, a Court of Law is also a Court of Equity. It is, therefore, of utmost necessity that when a party approaches a High Court, he must place all the facts before the Court without any reservation. If there is suppression of material facts on the part of the applicant or twisted facts have been placed before the Court, the Writ Court may refuse to entertain the petition and dismiss it without entering into merits of the matter.

¶146

34. The object underlying the above principle has been succinctly stated by Scrutton, L.J., in R v. Kensington Income Tax Commissioners, [(1917) 1 KB 486 : 86 LJ KB 257 : 116 LT 136 (CA)], in the following words:

¶147

"It has been for many years the rule of the Court, and one which it is of the greatest importance to maintain, that when an applicant comes to the Court to obtain relief on an ex parte statement he should made a full and fair disclosure of all the material

¶148

WP(C).No. 34619 of 2018

¶149

¶150

facts - facts, not law. He must not misstate the law if he can help it - the court is supposed to know the law. But it knows nothing about the facts, and the applicant must state fully and fairly the facts, and the penalty by which the Court enforces that obligation is that if it finds out that the facts have not been fully and fairly stated to it, the Court will set aside, any action which it has taken on the faith of the imperfect statement." (Emphasis supplied)

¶151

It is well settled that, a litigant who

¶152

invokes the extraordinary jurisdiction of this Court under Article 226 of the Constitution must come with clean hands and clean objects. The

¶153

judicial proceedings are sacrosanct, and no person would be allowed to abuse the judicial process, particularly, in public law remedy. In writ proceedings, the court places implicit faith on the parties and their pleadings, as it does not indulge in any fact finding or roving enquiry of what has

¶154

been asserted. Since Article 226 of the

¶155

Constitution of India espouses equity

¶156

jurisprudence, a litigant who has approached the Court with unclean hands, without disclosing full

¶157

WP(C).No. 34619 of 2018

¶158

¶159

facts, is not entitled for any reliefs.

¶160

In Dhananjay Sharma v. State of Haryana and others (1995) 3 SCC 757 the Apex Court held

¶161

that filing of false affidavit, or making false statement on oath in courts aims at striking a blow

¶162

at the Rule of Law and no court can ignore such conduct which has the tendency to shake public confidence in the judicial institutions, because the very structure of an ordered life is put at stake. It would be a great public disaster if the fountain of justice is allowed to be poisoned by anyone resorting to filing of false affidavits or giving of false statements and fabricating false evidence in a court of law.

¶163

In Muthu Karuppan, Commissioner of Police,

¶164

Chennai v. Parithi Ilamvazhuthi and another [(2011) 5 SCC 496] , the Apex Court expressed the view that filing of a false affidavit should be effectively curbed with a strong hand. In Sciemed Overseas Inc.

¶165

v. BOC India Limited and others (2016) 3 SCC 70] ,

¶166

WP(C).No. 34619 of 2018

¶167

¶168

the Apex Court held that the observations in Muthu

¶169

Karuppan's case (cited supra) was made in the context of contempt of court proceedings, the view expressed must be generally endorsed to preserve the purity of judicial proceedings.

¶170

Having considered the submissions made by the learned counsel on both sides, with reference to the pleadings and materials on record, and also the law laid down in the decisions referred to

¶171

supra, conclusion is irresistible that the petitioner, who secured an interim order from this

¶172

court by suppressing material facts, is not entitled for any discretionary relief in exercise of the writ jurisdiction of this Court under

¶173

Article 226 of the Constitution of India. The

¶174

petitioner, who is admittedly a chronic defaulter, is not legally entitled to seek instalment facility before this Court for repayment of the dues covered by Ext.P1 demand notice.

¶175

In the result, this writ petition is

¶176

WP(C).No. 34619 of 2018

¶177

¶178

dismissed imposing a cost of Rs.25,000/- (Rupees

¶179

Twenty five thousand only) payable by the petitioner to the Chief Minister's Distress Relief Fund, to provide relief to flood victims in Kerala.

¶180

The petitioner shall remit the said amount in the Chief Minister's Distress Relief Fund, within three weeks from the date of receipt of a certified copy

¶181

of this judgment. Failing which, the State Government shall recover the said amount by

¶182

initiating revenue recovery proceedings against the petitioner.

¶183

The remittance/recovery of Rs.25,000/- (Rupees Twenty five thousand only) as cost by/from the petitioner shall be brought to the notice of this Court by way of a memo filed by the learned Senior Government Pleader.

¶184

Sd/-

¶185

ANIL K.NARENDRAN,JUDGE

¶186

AV/18/12

¶187

WP(C).No. 34619 of 2018

¶188

¶189

APPENDIX

¶190