Partly allowed

Ummukulsu, v. Federal Bank Limited

Kerala HC13 Jan 2020OP (DRT)/1/2020

Case brief

AI extract

What is this about?

High Court extended the time limit to 31.01.2020 for the petitioners to deposit Rs.15,00,000/- as a condition precedent for the stay of dispossession granted by DRT, with a warning that non-compliance would automatically vacate the stay.

What did the court decide?

Extended the time limit for deposit of Rs.15,00,000/- (originally Rs.50,00,000/- per judgment text, corrected by court) until 31.01.2020; warned against automatic vacation of stay if not paid.

Ummukulsu, Vs Federal Bank Limited — Banking and Recovery | Kerala HC (2020)

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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 ALEXANDER THOMAS

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MONDAY, THE 13TH DAY OF JANUARY 2020 / 23RD POUSHA, 1941

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OP (DRT).No.1 OF 2020

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SA 378/2019 OF DEBT RECOVERY TRIBUNAL, ERNAKULAM

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PETITIONERS:

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1 UMMUKULSU,

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W/O.SHARAFUDHEEN, NECHITHODI HOUSE, MUKKANNAM, MANNARKAD P.O., PALAKKAD DISTRICT.

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2 SHARAFUDHEEN, AGED 48 YEARS, S/O.MAMMUNNI, NECHITHODI HOUSE, MUKKANNAM, MANNARKAD P.O., PALAKKAD DISTRICT.

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BY ADV. SRI.P.JAYARAM

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RESPONDENTS:

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1 FEDERAL BANK LIMITED, MANNARKAD BRANCH, CHILAMBUKADAN BUILDING, KODATHIPADY, P.O.MANNARKAD, PIN-678 582, REPRESENTED BY ITS BRANCH MANAGER/AUTHORISED OFFICER.

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2 ASSISTANT VICE PRESIDENT/AUTHORISED OFFICER UNDER SARFAESI ACT, LCRD PALAKKAD SATELLITE DIVISION, KMS COMPLEX, CHEDAYANKALAI, KANJIKODE-678 623.

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3 CHIEF MANAGER/AUTHORISED OFFICER, FEDERAL BANK, CHILAMBUKKADAN BUILDING, KODATHIPADI, MANNARKKAD-678 582.

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SRI.K.MADHUSOODHANAN, STANDING COUNSEL

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THIS OP(DRT) HAVING COME UP FOR ADMISSION ON 13.01.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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ALEXANDER THOMAS, J.

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------------------------------------------O.P.(DRT) No. 1 of 2020

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Dated this the 13^th day of January, 2020

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J U D G M E N T

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The case projected in this Original Petition (DRT) are

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as follows: The petitioners herein are spouses and are living with their children in the house constructed with the financial assistance of R1. As the 2^nd petitioner's business venture in abroad collapsed, he came back, which deadlocked the repayments and the account became non performing. The respondent bank issued notice under Sec.13(2) of the SARFAESI Act initiating recovery actions. The petitioners sent a reply notice to the bank which was not considered and the bank issued notice under Sec.13(4) of the said Act. Thereupon the petitioners challenged the action of the bak before this Court by filing WP(C) 35034/2018, wherein the petitioners were permitted to make an offer of one time settlement to the bank. The bank rejected the offer and made a claim of Rs.2,95,02,619.68/- with interest before the CJM, Palakkad. The learned Magistrate deputed a Commissioner to take

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..3..

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O.P.(DRT) No. 1 of 2020

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possession of the house and compound. According to the petitioners the amount due to the bank is about Rupees Two Crores. They have repaid about Rupees One Crore Fifty Thousand. The security offered to the bank is worth Rupees Ten Crores. In view of the action under Sec.14 of the SARFAESI Act brought by the bank, the petitioners approached this Court again by filing WP(C).No.26398/2019, wherein the petitioners were directed to pay Rupees Ten Lakhs within 2 weeks, which was complied by them. The writ petition was closed giving liberty to the petitioners to approach the DRT seeking further remedies, upon which the petitioners submitted S.A.No.378/2019 before DRT-I, Ernakulam seeking stay of proceedings to dispossess them. The Tribunal granted stay with condition to pay R,15,00,000/- with 5 days. The petitioners could not pay the amount within the time stipulated. The Tribunal ought to have granted sufficient time to comply the condition. It is in the light of these avements and contentions that the petitioners have filed the instant Original Petition

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O.P.(DRT) No. 1 of 2020

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..4..

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(DRT) filed under Article 227 of the Constitution of India with

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the following prayers.

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“

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i. Call for the records relating to Exhibit P9 order from Debts Recovery Tribunal-I, Ernakulam.

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ii. Allow eight weeks' time more to pay Rs.15,00,000/- to the respondent bank as psecified in Exhibit P9 order.

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iii. Grant such other reliefs as this Honourable Court may deem fit and proper in the facts and circumstances of the case.”

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Heard Sri.P.Jayaram, learned counsel appearing for

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the petitioners and Sri.K.Madhusoodanan, learned Standing Counsel appearing for the respondent Bank.

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Sri.K.Madhusoodanan, learned Standing Counsel appearing for the respondent Bank would submit on the basis of instructions of his party that the total outstanding dues as on 26.12.2019 for closure of the loan account is Rs.2,67,09,538/and that the petitioners have already defaulted with the payments inspite of this Court's indulgence as per Exts.P-1 & P8 judgments etc and that the Debt Recovery Tribunal-II, Ernakulam, has been very liberal in favour of the petitioners by insisting that they should make payment of only

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..5..

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O.P.(DRT) No. 1 of 2020

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Rs.50,00,000/- within 5 days, as per the impugned Ext.P-9 order dated 11.12.2019 as a condition for granting stay in the securitisation application filed by the petitioners as S.A. No. 378/2019, and that the petitioner has not made any such payment, hence the stay granted as per Ext.P-9 stood thus vacated.

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After hearing both sides and after careful evaluation of the facts and circumstances of the case, this Court does not find any adequate grounds to interdict with the said considered decision taken by the Debt Recovery Tribunal insisting that the petitioner should pay atleast Rs.50,00,000/- as a pre-condition in the grant of stay as per Ext.P-9 stay order in securitisation application filed by the petitioners as S.A. No. 378/2019 on the file of the Debt Recovery Tribunal-II, Ernakulam. However, having regard to the facts and circumstances of the case, it is ordered that the said time limit stipulated in Ext.P-9 order for deposit of abovesaid amount of Rs.50,00,000/- will stand extended until 31.1.2020 as last chance. It is made clear that in

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O.P.(DRT) No. 1 of 2020

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..6..

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case the petitioner does not make any such payment of Rs.50,00,000/- on or before 31.1.2020, then the stay order granted thereby will stand automatically vacated without any further orders either from the Tribunal or from this Court, and thereupon the respondents may proceed further with the impugned proceedings from the stage where it was stopped.

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With these observations and directions, the above Original Petition (DRT) will stand disposed of.

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Sd/-

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ALEXANDER THOMAS, JUDGE

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MMG

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O.P(DRT) No. 1/2020

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In paragraphs 3 and 4 of the judgment dated 13/01/2020 in O.P.(DRT) No. 1 of 2020, the figure “Rs.50,00,000/-” is corrected as “Rs.15,00,000/-” at appropriate places, as per order dated 31/01/2020 in I.A. No. 1 of 2020 in O.P.(DRT) No. 1 of 2020.

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Sd/Deputy Registrar

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O.P.(DRT) No. 1 of 2020

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..8..

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APPENDIX

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PETITIONERS' EXHIBITS:

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EXHIBIT P1 TRUE COPY OF THE NOTICE DATED 21.03.2017 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONERS UNDER SECTION 13(2) OF THE SECURITIZATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002. EXHIBIT P2 TRUE COPY OF THE NOTICE DATED 13.04.2018 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONERS UNDER SECTION 13(4) OF THE SECURITIZATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002. EXHIBIT P3 TRUE COPY OF THE JUDGMENT DATED 29.01.2019 IN WPC NO.35034/2018 HIGH COURT OF KERALA. EXHIBIT P4 TRUE COPY OF THE LETTER/ORDER DATED 05.03.2019 ISSUED BY THE RESPONDENT BANK REJECTING THE OFFER OF ONE TIME SETTLEMENT MADE BY THE PETITIONERS. EXHIBIT P5 TRUE COPY OF THE NOTICE/MEMO DATED 27.09.2019 ISSUED BY THE ADVOCATE COMMISSIONER IN MC NO.175/2019 ON THE FILES OF CHIEF JUDICIAL MAGISTRATE, PALAKKAD FOR TAKING POSSESSION OF THE PETITIONER'S HOUSE AND COMPOUND.

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..9..

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O.P.(DRT) No. 1 of 2020

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EXHIBIT P6 TRUE COPY OF THE RECEIPT DATED 04.07.2019 SHOWING PAYMENT OF RS.19,00,000/- TO THE PETITIONERS' ACCOUNT AT RESPONDENT BANK, MANNARKKAD BRANCH. EXHIBIT P6 A TRUE COPY OF THE RECEIPT DATED 04.07.2019 SHOWING PAYMENT OF RS.1,00,000/- TO THE PETITIONER'S ACCOUNT AT RESPONDENT BANK, MANNARKKAD BRANCH. EXHIBIT P6B TRUE COPY OF THE RECEIPT DATED 25.09.2019 SHOWING PAYMENT OF RS.20,00,000/- TO THE PETITIONERS' ACCOUNT AT RESPONDENT BANK, MANNARKKAD BRANCH.

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EXHIBIT P7 TRUE COPY OF THE INTERIM ORDER DATED 09.10.2019 IN WPC NO.26398/2019 OF HIGH COURT OF KERALA. EXHIBIT P8 TRUE COPY OF THE JUDGMENT DATED 29.10.2019 IN WPC NO.26398/2019 OF HIGH COURT OF KERALA.

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EXHIBIT P9 TRUE COPY OF THE ORDER DATED 11.12.2019 ISSUED BY DEBT RECOVERY TRIBUNAL-1, ERNAKULAM IN SA NO.378/2019.

Ummukulsu, v. Federal Bank Limited

Case brief

What is this about?

What did the court decide?

Ummukulsu, v. Federal Bank Limited

Case brief

What is this about?

What did the court decide?

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