Allowed

The State Bank of Travancore v. Jose Paul

Kerala HC9 Jun 2020WA/160/2017

Case brief

AI extract

What is this about?

Writ appeal by a bank against a single Judge's order directing refund of Rs.79,80,000 deposited by third parties in a SARFAESI sale dispute. The Division Bench held the application was hit by res judicata and virtually modified a judgment that had become final in the earlier writ appeal, and set the order aside.

What did the court decide?

Writ appeal allowed; order dated 06.01.2017 in I.A. No.19644 of 2016 in W.P.(C) No.28355 of 2015 set aside.

The State Bank of Travancore Vs Jose Paul — 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 THE CHIEF JUSTICE MR.S.MANIKUMAR

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THE HONOURABLE MR. JUSTICE SHAJI P.CHALY

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TUESDAY, THE 09TH DAY OF JUNE 2020 / 19TH JYAISHTA, 1942

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WA.No.160 OF 2017

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(AGAINST THE ORDER DATED 06.01.2017 IN I.A. NO.19644/2016 IN WPC NO.28355/2015 OF HIGH COURT OF KERALA)

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APPELLANT/2ND RESPONDENT IN I.A.-1ST RESPONDENT IN WPC:

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THE STATE BANK OF TRAVANCORE MUNNAR-685612, IDUKKI DISTRICT, KERALA, REPRESENTED BY ITS MANAGER.

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BY ADV. SRI.SANTHOSH MATHEW, SC, STATE BANK OF TRAVANCORE

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RESPONDENTS/PETITIONERS & RESPONDENTS1, 3 & 4 IN IA-ADDITIONAL RESPONDENTS & PETITIONER & RESPONDENTS 2 & 3 IN WPC.:

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1 JOSE PAUL, S/O POULOSE, THELAKATTU HOUSE, NALLATHANNI ROAD, MUNNAR-685612.

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2 JAIMON, AGED 39 YEARS, S/O K.M.JOSEPH, KUZHIKOMBAL HOUSE, MARKET ROAD, PALA, KOTTAYAM-686009.

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3 JERRY GEORGE, KAIPILLIL HOUSE, MUNNAR, IDUKKI DISTRICT, KERALA, REPRESENTED BY HIS POWER OF ATTORNEY, MR. KISHORE RAJENDRAN, KARUNALAYAM, UNICHIRA, THAIKKAVU ROAD, CHANGAMPUZHA NAGAR PO, KOCHI-682033.

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4 REVATHINGAL KANAKANAMANI THAMPURATTY, W/O. SUNDAR RAJAN, 41/696, ST. MARATHY CHURCH ROAD, PALARIVATTOM, KOCHI-6892025.

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5 UNION OF INDIA, REPRESENTED BY ITS SECRETARY, MINISTRY OF FINANCE AND BANKING, NEW DELHI-110001.

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R1 BY ADV. SRI.P.MARTIN JOSE R4 BY ADV. SRI.DINESH R.SHENOY R5 BY ASSISTANT SOLICITOR GENERAL SRI.P.VIJAYAKUMAR

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THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 20-02-2020, THE COURT ON 09-062020 DELIVERED THE FOLLOWING:

W.A.No.160 of 2017

JUDGMENT

Dated this the 9^th day of June, 2020

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S.Manikumar, CJ.

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Instant writ appeal is filed against order dated 06.01.2017 in I.A. No.19644 of 2016 in W.P.(C) No.28355 of 2015, by which the writ court disposed of the interlocutory application as under:

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“4. In regard to the question of maintainability of the application, there is no reason why this Court should not pass an order. As far as judgment dated 18/8/2016 is concerned, it was passed under special circumstances when there was an offer to pay the entire sale amount by the principal debtor. As far as the petitioners herein are concerned, they are third parties and they had offered to deposit the amount on behalf of the principal debtor. However, the payment of the amounts as stated in the judgment dated 18/8/2016 was a condition imposed for not confirming the sale whereas it was also specifically mentioned that in the event of the payment not being made, the Bank was entitled to proceed with confirmation of sale. The Division Bench also did not interfere with the aforesaid judgment. Though it could be stated that there is merger, still on account of the subsequent events that had taken place after the judgment, it is always open for this Court to exercise the jurisdiction under Article 226 of the Constitution of lndia and issue further orders. In the light of the said fact. I do not think that this application can be rejected on the ground that it is not maintainable.

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As far as the amount in deposit is concerned, it was made by third parties, the petitioners herein, under certain special circumstances. The question involved was whether the

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sale conducted by the Bank in favour of the petitioner in WP(C) No. 29589/15 can be confirmed or not. Direction had been issued by the judgment dated 18/8/2016 to avoid the sale on account of certain special circumstances alone as stated above. Under such circumstances, when the conditions imposed by this Court had not been complied with and the sale was confirmed by the Bank, necessarily the Bank is liable to return the amount deposited by the petitioners to them.

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Hence, l am of the view that this application is to be allowed. Accordingly, there will be a direction to the 2^nd respondent to refund a sum of Rs.79,80,000/-(Rupees Seventy nine lakhs eighty thousand only) remitted by the petitioners to them within a period of two weeks from the date of receipt of a copy of this order.

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Learned counsel for the respondent Bank insisted that cost has to be imposed on the petitioners. Taking into account the fact that the amount had been remaining with the Bank for quite some time, I do not think it necessary to impose any cost. I.A. is disposed of as above.”

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Short facts leading to the appeal are that, appellant herein is the 2^nd

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respondent in I.A. No.19644 of 2016 in W.P(C) No.28355 of 2015. Writ petition was filed by respondent No.1, challenging the proceedings initiated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 by the appellant bank. The prayers sought for in the writ petition are as under:-

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“i) Call for the records relating to Exhibit-P4 notice of sale dated 17.09.2015

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ii) Direct that petitioner be supplied with a copy of the order in S.A. No.490/2015 so as to avail of his appellate remedy.

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iii) Stay all further proceedings against property of the petitioner for a reasonable time to receive copy of the order and for filing appeal.

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iv) Direct the 1^st respondent to consider Exhibit-P5 representation dated 15.09.2015 and pass an order on the same before proceeding any further with the sale of the property of the petitioner.”

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The auction conducted by the bank was deferred and the writ petition was disposed of by a judgment dated 18.08.2016, recording the undertaking given by the writ petitioner that a sum of Rs.50 lakhs should be paid on or before 23.08.2016; a further amount of Rs.25 lakhs on or before 01.09.2016, and the balance amount of Rs.2.25 Crores on or before 15.09.2016. It was further undertaken that the interest of Rs.3.3 Crores from 01.08.2016 would be paid at the contractual rate till the date of payment and 8% interest on Rs.63,32,500/- would also be deposited by 23.08.2016.

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Since Rs.2.25 Crores could not be remitted as undertaken by the writ petitioner, I.A. No.14601/2016 was filed for enlarging the time stating that conditions (1), (2) and (5) of the judgment have already been complied by the petitioner. A sum of Rs.50 lakhs was paid to the bank on 22-08-2016. Thereafter, a sum of Rs.25 lakhs was also paid on 31.08.2016. The 8% interest on Rs.63,32,500/- coming to Rs.5,65,000/- was also deposited on 23.08.2016. All the above said amounts were paid into Account No.67259480472 of the State Bank of Travancore. The said account number was furnished by the respondent bank. However, the balance amount of

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Rs.2.25 Crores is being financed by Dhanalakshmi Bank, Munnar Branch, and the same is under process. The loan application file of respondents 4 and 5 has been considered favourably, recommended and forwarded to the bank's divisional office in Kochi. It is understood that the file is then forwarded to the Credits Committee of the bank at Thrissur, which meets once every month. Once the Credit Committee passes it, the loan amount will be disbursed within three weeks. Petitioner has been informed that the file is being considered in the meeting of the Credit Committee on 09.09.2016. Thereafter, the whole of the next week happened to be bank holidays due to Onam, Eid etc. It is further stated that, actual disbursal will not take place before 15.09.2016 and, therefore, requires a further period of 20 days. It was, therefore, prayed to enlarge the time for making the payment of Rs.2.25 Crores, until 15.10.2016.

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It is further stated that a mistake appears to have been crept in the judgment, in condition number (4), wherein it is directed that interest on Rs.3.3 Crores has to be paid from 01.08.2016 at the contractual rate. It is submitted that the amount due to the bank is Rs. 8 Crores and not Rs.3.3 Crores. Therefore, the interest to be paid to the bank will be Rs.3 Crores from 01.08.2016, Furthermore, the names of additional respondents are not shown in the cause title of the judgment. An interim application as I.A. No.13225/2016 was filed seeking impleadment along with other applications on 17-08-2016 and this Court had taken note of the same. The above

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mistakes are only to be corrected and reliefs are sought for accordingly.

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I.A. No.14609 of 2016 has also been filed for a clarification that the amount covered by the so-called settlement between the petitioner and additional respondents 4 and 5 was for Rs.3 Crores and not for Rs.3.3 Crores. Vide order dated 26.09.2016, a learned single Judge of this Court rejected I.A. No.14602 of 2016, which reads thus:

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“This is an application seeking enlargement of time for payment of Rs.2.25 Crores to the respondent Bank until 15.10.2016.

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By judgment dated 18.08.2016, an earlier interim order passed on 29.07.2016 had been modified and certain directions had been issued. According to the petitioner, he had complied with directions in Clause Nos.1, 2 and 5. In fact substantial payment ought to have been made as per Clause No.3 that is balance amount of Rs.2.25 Crores on or before 15.09.2016. These directions came to be passed in a case where the property had already been sold and purchased by the Catholic Diocese of Vijayapuram. The order passed in this case was virtually an agreed order and without going into the merits of the contentions urged between the parties. Under such circumstances, when the time limit specified by this Court is not complied with, I don't think that the petitioner is entitled to seek further time in the matter. Even as on today, no payment has been made with reference to compliance of condition Nos.3 and 4. Further in the application for extension of time, the contention urged is that since the whole week starting from 09.09.2016 were holidays due to Onam, Eid etc., the actual disbursal of funds could not be made. As already stated, even as on today, no attempt had been made by the petitioner to comply with the directions issued. Hence, I don't find any reason to

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extend the time already granted as per the judgment afore stated. This application is, therefore, dismissed.

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I.A. No.14609 of 2016

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Closed”

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Challenging the above order, W.A. No.2244 of 2016 has been filed by Jerry George, the petitioner in W.P.(C) No.28355 of 2015, and by judgment dated 18.11.2016, a Hon'ble Division Bench of this Court dismissed the writ appeal, which is reproduced.

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“This appeal comes up with an application seeking condonation of delay in its institution.

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We have heard the learned counsel for the appellant and the learned counsel for the first respondent.

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The matter arises during the course of action taken by the first respondent Bank under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act (SARFAESI Act). Notwithstanding the fact that matters relating to that jurisdiction are to be carried through the statutory hierarchy as repeatedly laid down by the Hon'ble Apex Court, including in United Bank of India v. Satyawati Tondon [(2010) 8 SCC 110], the learned single Judge had issued certain interim orders apparently hoping that the matter would get settled. On 29.07.2016, there was a direction to deposit Rupees Three crores. Later, when the matter was taken up on 18.08.2016, two writ petitions were disposed of reckoning essentially an out of court settlement, going by the submission of the parties, as between the petitioner and two persons who are referred to in the impugned judgment as additional respondents 4 and 5 (may be the private proposed assignees of the petitioner).

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Through this appeal what is under challenge is the refusal of the learned single Judge to allow l.A.No.14609/2016 whereby a clarification was sought that the amount covered by the so called settlement between the petitioner and additional respondents 4 and 5 is for Rupees Three crores and not for Rs.3.3 crores and against the learned single Judge dismissing the application for enlargement of time for payment of Rs.2.25 crores which was due for payment on or before 15.09.2016.

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Taking the contents of the impugned judgment dated 18.08.2016, including the aforesaid interim order, we are clear in our mind that the term '3.3 crores' in condition No.4 in that judgment would essentially be only '3 crores'. This is what emanates out of the interim order dated 29.07.2016 and the judgment dated 18.08.2016. We accordingly vacate the impugned order in so far as it is on I.A. No.14609 of 2016 and allow that application granting a clarification as sought for; however, not binding either the Bank or any auction purchaser or third party interests because what has been recorded through the judgment dated 18.08.2016; particular in paragraph 2 thereof; is a private arrangement between the petitioner and additional respondents 4 and 5.

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In so far as I.A. No.14602/2016 is concerned, we have gone through the reasons given by the learned single Judge for refusing to extend the time. We also see that in so far as the judgment in W.P.(C) No.29589/2015 is concerned, it has become final. That position notwithstanding, mere enlargement of time does not suffice the purpose because we are told by the learned counsel for the Bank that third party interests have intervened and the property had been sold. He also submits that due registration had been effected. We record these factors. Law has to take its course.

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The appeal is dismissed leaving the petitioner to take recourse to any remedy as may be available to him in accordance with law. In the light of the aforesaid, we do not find any reason to condone the delay. Accordingly, the delay petition is also dismissed.”

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After the disposal of W.A. No.2244 of 2016, I.A No.19644 of 2016 has been filed by the additional respondents 4 and 5 in W.P.(C) No.28355 of 2015, for a direction to the appellant bank to refund Rs.79,80,000/-, basically stating that the 1^st respondent Bank has initiated proceedings under the SARFAESI Act, 2002 against the petitioners therein and brought the property for sale. There was a mediation settlement by the writ petitioner and appellant bank, whereby the bank agreed to settle the liability for Rs.3 Crores and to release the property. Since the writ petitioner had no money to settle with the bank, he negotiated for sale of the properties with the petitioners in the I.A for Rs.3 Crores and agreed to purchase the property. Writ petitioner submitted Exhibit-P5 representation dated 15-09-2015 before the bank seeking to repay the amount in installments and approached this Court by filing a writ petition for deferring Exhibit-P5. Later, the petitioners were impleaded as respondents 4 & 5 in the writ petition, and it was accordingly, that Annexure-A judgment dated 18.08.2016 was rendered with the conditions specified above. Thereafter, the 1^st petitioner remitted Rs.25 lakhs and the 2^nd petitioner, from the account of ‘Eden Holidays’, remitted Rs.25 lakhs on 22.08.2016 in SBT Munnar. Another sum of Rs.4,80,000/- was

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remitted on 23.08.2016, equally by the 1^st petitioner from his account and 2^nd petitioner from the account of ‘Eden Holidays‘ in SBT, Munnar. As per Annexure-A judgment, another sum of Rs.25 lakhs was payable on or before 01-09-2016 and the petitioners paid Rs.12,50,000/- each, on 31-08-2016 totalling Rs.25 lakhs to SBT, Munnar, and bank statements are produced as Annexures-B and C. Thus, it can be seen that the petitioners have remitted Rs.79,48,000/- to the appellant bank, towards the settlement arrived. Other aspects with regard to the filing of the applications by the writ petitioner and their consequences are also stated.

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To the said application, a statement has been filed by the appellant herein pointing out that bank has nothing to do with the internal arrangements made between the writ petitioner and the additional respondents, and a perusal of bank statement revealed that, amounts were deposited in the account of the additional respondents before actual payment was made. It was also pointed out that remittances were made by the writ petitioner, as undertaken before this Court. That apart, it is stated that the petitioners in the interlocutory application are not entitled to seek refund of Rs.79,80,000/~ remitted by them, based on the direction of this Court on 18.08.2016 and a sum of Rs. 3,64,24,196/- was due from Sri. Jerry George.

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Sri. Jerry George has made an internal arrangement with the petitioners in I.A No.19648 of 2016 for payment of dues outstanding towards

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the State Bank of Travancore. It is also stated that a perusal of Annexure-B Statement of Account produced would show that on 22-08-2016 a sum of Rs.15,00,000/- was deposited into the account of M/s. Eden Holidays by cash. On 23-8-2016 a sum of Rs. 2,40,000/- was deposited by way of cash. Similarly on 24-8-2016 a sum of Rs.3,70,000/- was deposited by cash and on 30-8-2016, a sum of Rs.12,00,00/- was deposited by cash. The Writ Petitioner has used account of M/s. Eden Holidays for depositing the cash and then, root it through that account to the State Bank of Travancore. It is pointed out that similarly, a perusal of Annexure-C would reveal that a sum of Rs.20,00,000/- was deposited as cash to the account of Jaimon Joseph on 4-8-2016 and a sum of Rs. 5,00,000/- was deposited as cash on 17-8-2016. A sum of Rs.8,00,000/- was deposited as cash on 22-8-2016 and a further sum of Rs.2,50,000/- deposited as cash on 23-8-2016. It is only after the amount was deposited by cash, transfers were made to the State Bank of Travancore. Thus, it is crystal clear that the money due to be paid by the petitioner Sri. Jerry George was rooted through the petitioner in I.A No.19648 of 2016.

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It is further stated that W.A No.2244 of 2016 was filed by Sri. Jerry George, wherein it is stated that condition (a), payment of Rs. 50,00,000/on or before 23-8-2016; condition No. (b) payment of Rs.25 Lakhs on or before 1-9-2016, and condition No.(e) payment of 8% interest of Rs.63,32,500/- on or before 23-8-2016 were complied by the appellant. Thus, Sri. Jerry George himself has admitted that he had made the payment

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as per the averments in the above said appeal. It is specifically contended that the bank had already conducted auction of the property owned by the writ petitioner, due to failure on the part of the writ petitioner in complying with the direction of this Court. The auction has been confirmed in favour of Catholic Diocese of Vijayapuram, for a sum of Rs.2,53,30,000/-. After giving credit to Rs.2,53,30,000/- the bid amount, and Rs.75,00,000/remitted by the petitioner in terms of the interim direction of this Court in Writ Petition No.28355/2015, Rs.35,94,196/- is due from the writ petitioner to the bank as on date. Rs.4,80,000/- remitted by the petitioner as interest for Rs.63,32,500/- in terms of the above direction has not been appropriated by the bank, so far.

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W.A.No. 2244 of 2016 filed by Sri. Jerry George challenging the judgment of the writ court in W.P(C) No. 28355 of 2015 has been dismissed by a Hon'ble Division Bench vide judgment dated 18.11.2016, clarifying that the amount of Rs.3.3 Crores mentioned in condition No.4 therein would essentially be only Rs.3 Crores, but further clarified that the same is not binding, either on the bank or any auction purchaser or third party interest because what has been recorded through the judgment dated 18.08.2016 particularly in paragraph 2 thereof is a private arrangement between the writ petitioner and additional respondents 4 and 5. Accordingly, the Hon'ble Division Bench confirmed the finding rendered by this Court in I.A. No.14602 of 2016 refusing to grant extension of time.

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It is further contended that the judgment of this Court in W.P.(C). No.28355 of 2015 has merged with the judgment in W.A. No.2244 of 2016, whereby the Hon'ble Division Bench has observed that private arrangements made between the writ petitioner and additional respondents 4 and 5 is not binding on the bank. Hence, the bank has sought for dismissal of the I.A.

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Therefore, the appellant bank submitted that the learned single Judge has passed the impugned order without taking into account the true facts and circumstances and hence, not in accordance with law.

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Heard learned counsel for the parties and perused the materials available on record.

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Record of proceedings shows that the writ court has passed an interim order dated 29.07.2016 in W.P.(C) Nos.28355 & 29589 of 2015, directing the writ petitioner to deposit an amount of Rs.3 Crores with the appellant bank within a period of two weeks. It was further ordered that the petitioner shall remit 8% interest on Rs.63,32,500/- from the date of deposit before the bank in a no-lien account within the aforesaid period. Thereafter, writ petitioner has filed I.A. No.13225 of 2016 on 17.08.2016 for impleading additional respondents. In the said interlocutory application, writ petitioner has stated that he has agreed to pay the said amount towards final settlement along with the interest amount to the auction purchaser Church because, he has entered into an agreement with Mr. Jose Paul, S/o. Poulose, Thelekattu House, Nallathanni Road Munnar and Mr. Jaimon, S/o.

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K.M.Joseph, Kuzhikombal House, Market Road, Pala, Kottayam on 7.4.2016 for purchase of his property for a total sum of Rs.4 Crores, out of which Rs.3 Crores is to be paid to him immediately. It was further stated in the application that the delay is not due to any negligence or laches on the part of the writ petitioner, but only due to the aforesaid reasons, and the purchasers had undertaken to forthwith pay a sum of Rs.50,00,000/- into any account of State Bank of Travancore as directed by the writ court. Thereafter, interim applications were filed for permitting him and the additional respondents to make the payment of Rs.50 lakhs to the bank.

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Material on record further discloses that writ petitioner has filed I.A. No.13227 of 2016 seeking enlargement of time to pay Rs.2.5 Crores to the appellant bank, on payment of additional interest until 15.09.2019. In the said application, writ petitioner has averred that he has already taken steps to pay to the auction purchaser Church, the amount due to it, and to forthwith make the payment of a sum of Rs.50 lakhs to the appellant bank. It was also stated therein that he was ready and willing to pay the remaining amount of Rs.2.5 Crores to the bank as per the settlement, including the additional interest upto the date of actual payment within 15.09.2016. Along with the application, writ petitioner has produced agreement dated 07.04.2017, which is reproduced hereunder:

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“AGREEMENT FOR SALE

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THIS AGREEMENT is made this the 07.04.2016 (Seventh day of April Two thousand and Sixteen between 1) Jose Paul, aged 48

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years, S/o. Paulose, Thelekkattu House, Munnar kara, Munnar P.O., KDH Village, Devikulam Taluk, Idukki District, Kerala State, (Voter Identity Card No.KL/14/083/198154) and 2) Jaimon S/o. Joseph, aged 39 years, Kuzhikombil house, Anthyalam Kara, Karoor village, Meenachil Taluk, Kottayam District, Kerala State (PAN CARD NO.AIKPJ2879A) (hereinafter referred to as the 'First Party', which term shall mean and include their legal heirs, administrators and assigns) on the one part AND JERRY GEORGE CHERIAN, aged 46 years, S/o. K. George Cheriyan, Kappalil House, Munnar, Idukki District (passport No.Z2038618) (herein after referred to as the 'Second Party', which term shall mean and include his legal heirs, administrators and assigns) on the other part;

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WHEREAS the Second Party is the owner of 17.64 cents of land and a multi-storeyed building in Survey No.62/3A of KDH Village of Devicolam Taluk in Idukki District more particularly described in the schedule hereto;

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AND WHEREAS the Second party had availed financial assistance from the Munnar Branch of State Bank of Travancore for establishing a hotel complex in the schedule property but could not complete the same for non-disbursal of the entire loan and due to shortage of funds leading to disputes with the bank and legal proceedings before the court of law;

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AND WHEREAS the Second Party decided to sell the schedule property to settle the issues with the bank and was on the look out of prospective buyers for the schedule property;

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AND WHEREAS the Second Party has offered to sell the schedule property to the First party, after settling all outstandings with the State Bank of Travancore and upon receipt of the balance mount of sale consideration from the First Party and the First Party has accepted the same subject to the terms and conditions hereunder.

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NOW THEREFORE THIS AGREEMENT WITNESSETH AS FOLLOWS:-

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The Second Party offered and the First Party hereby agrees to purchase the schedule property for a mutually agreed total sale consideration of Rs.4,50,00,000/- (Rupees Four Crores Fifty lakhs only)

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The Second Party is intending to make initial payment for obtaining a suitable settlement from the banks for Rs.3 Crores (Rupees Three Crores only) through a mediation with the bank.

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The First party shall pay an advance of Rs.40,00,000/(Rupees Fourt Lakhs only) out of the sale consideration, within seven days of the Second Party obtaining mediation order from the court, enabling and permitting the Second Party to effect payments towards, settlement of the loan dues of the Second party, owned to the State Bank of Travancore.

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Both parties, particularly the First party, may try and negotiate with the State Bank of Travancore for a full and final settlement of the claim of the bank against the Second Party for a lesser amount and the First Party shall shall pay up such final figure as per the court order and within such time that the bank stipulates as duly instructed in writing by the Second party and acknowledged by the Second party within 30.06.2016 of such date fixed by the court. The above said payment shall be made, by the first party after the second party complying with the conditions stipulated herein above. The First party has represented to the Second Party and made the Second Party believe that the First Party has adequate financial resources for the same or will be able to arrange such financial assistance from for the same.

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After the settlement of the claims of the bank by the First party as above, the Second Party shall forthwith execute sale deed in respect of the scheduled property in favour of the First Party or its nominee and shall put the first party in possession of the schedule property.

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The First Party shall pay the balance sale consideration (after deducting the advance amount and amounts paid to the Second Party or paid to the SBT as instructed by the second party under this agreement) within eleven months from the date of this agreement.

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The Second Party shall ensure that all litigations pending with respect to the schedule property by the Poonjar Family as well as by the Bishop of Vijayapuram Diocese/Mount Carmel Church shall be ended/concluded by settlement with the Poonjar Family and by securing withdrawal or disposal of the other respective cases.

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The First Party is fully aware that the first priority of the second party is to settle the claims of the State Bank of Travancore within such time that the said bank stipulates and it shall be the duty of the First Party to arrange the amount as above to clear the liabilities of the second party to the bank.

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The Second Party shall utilise all amounts received under the agreement to settle the claims of the bank and shall not utilise the funds for any other purpose till the claim is settled.

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Within or upon completion of the period of eleven months fixed for the performance of this agreement, the first party shall pay the second party, the balance sale consideration in full, less the amounts already paid as per the agreement to the second party and to the bank.

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The First Party shall make all payments under this agreement promptly and fully to the Second Party.

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The second party assures and makes the first party believe that there are no other disputes, claims or encumbrance or liabilities that what is stated in this agreement.

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In the event the second party hereto fails to perform his party of the agreement or any of the assurances made by the second party is found to be untrue, the first party may sue for specific performance of the contract in addition to damage and get the sale deed executed through court.

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In the event the first party hereto fails to perform their part of the agreement within the maximum period of eleven months, the second party shall be entitled to recover the balance amount from the First party and their assets. Further at the time of execution of the title deed, the First party shall also give adequate security of corresponding value, securing the balance payment to the Second party which the second party shall release back to the First party upon full payment by the second party as per this agreement.”

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Annexure-I letter dated 25.12.2016 sent by the writ petitioner to

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the appellant Bank is extracted hereunder:-

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“25-12-2016

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Jerry George Cherian PO. Box: 28346, Dubai, United Arab Emirates

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To:-

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(i) The Chief Manager, State Bank of Travancore, Ernakulam.

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(ii) The Branch Manager, State Bank of Travancore, Munnar Branch, Munnar.

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Sub;- To adjust the advance amount deposited to the Loan A/c. No. 67259480472 and to release the attached collateral properties and balance amount-request reg.

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Dear Sir/s,

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As you are aware the loan availed by me towards Kaippallil Resorts in my property in Munnar Town ended in default leading to legal proceedings both before the Debt Recovery Tribunal and the Hon’ble High Court of Kerala.

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As a result of my earnest attempt to repay the loan raised from your bank I entered into a sale agreement with Mr. Jaimon Joseph and Mr. Jose, who approached me for purchase of my property in August 2015 with the promise that they will clear the settlement amount to your bank and the balance to me. Believing their words, l have also obtained orders from the Hon'ble High Court for payment of amounts as per the court direction. The Hon'ble High Court gave the following directions:-

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(a) A sum of Rs. 50 lakhs on or before 23-08-2016.

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(b) A further sum of Rs. 25 lakhs on or before O1-09-2016.

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(d) Interest on Rs. 3.3 crores from 01-08-2016 will be paid at the contractual rate till the date of payment.

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(e) 8% interest on Rs. 63,32,500 will also be deposited by 23-08-2016.

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However, l was able to comply with only conditions (a), (b) and (e). The major chunk of Rs. 2.25 crores and interest due on it as per condition (d) could not be complied because the purchasers Jaimon and Jose violated the agreement and did not furnish the balance amount that they were bound to under the agreement. They have thus committed breached of agreement resulting in my property being sold in auction thus causing severe loss to me, both financial and otherwise, which cannot be compensated in terms of money.

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The assurance given by me before the Hon‘ble High Court to make the payments was solely believing the said persons, who had promised to make timely payments that they were bound under the agreement. The willful violation of agreement by the above parties has thus resulted in confirmation of sale of my highly valuable property to third party by the bank, which has caused irreparable financial loss and mental agony to me. The current situation could

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have been easily avoided had they complied with the terms of the agreement, which l believe was with malafide intentions. In view of the above, the said Jaimon and Jose are not only liable to compensate me for the loss that is caused by them as well as to the bank. They are therefore not eligible to receive back the advance amount deposited by them.

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It is therefore most humbly requested that your goodselves may be pleased to adjust the amounts deposited towards the loan account and release the other collateral properties attached to the loan and balance, if any, may kindly be released to me. This is without prejudice to my rights to proceed against the said Jaimon and Jose for the severe loss and injury caused to me.

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Thanking you,

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Yours faithfully (Jerry George Cherian)”

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One of the questions raised by learned counsel for the appellant

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is, whether, after the dismissal of W.A. No.2244 of 2016 by a Hon'ble Division Bench of this Court confirming the judgment of the writ court in W.P.(C) No.28355 of 2015, filing of I.A. No.19644 of 2016 in W.P.(C) No.28355 of 2015, is not maintainable. To substantiate the same, learned counsel has relied on the decision of the Hon'ble High Court of Madras in Kalyanasundaram v. Indrani and Others [(1995) 2 MLJ 113] and that of the Hon'ble Supreme Court in Kunhayammed and Others v. State of Kerala and Another [(2000) 6 SCC 356], wherein it was held as under:

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“39. We have catalogued and dealt with all the available decisions of this Court brought to our notice on the point at issue. It is clear that as amongst the several two-Judges Bench decisions there is a conflict of opinion and needs to be set at rest. The source of power conferring binding efficacy on decisions of this Court is not uniform in all such decisions. Reference is found

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having been made to (i) Article 141 of the Constitution, (ii) doctrine of merger, (iii) res-judicata, and (iv) Rule of discipline flowing from this Court being the highest court of the land.

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A petition seeking grant of special leave to appeal may be rejected for several reasons. For example, it may be rejected (i) as barred by time, or (ii) being a defective presentation, (iii) the petitioner having no locus standi to file the petition, (iv) the conduct of the petitioner disentitling him to any indulgence by the Court, (iv) the question raised by the petitioner for consideration by this Court being not fit for consideration or deserving being dealt with by the Apex Court of the country and so on. The expression often employed by this Court while disposing of such petitions are - heard and dismissed, dismissed, dismissed as barred by time and so on. May be that at the admission stage itself the opposite party appears on caveat or on notice and offers contest to the maintainability of the petition. The Court may apply its mind to the merit-worthiness of the petitioners prayer seeking leave to file an appeal and having formed an opinion may say dismissed on merits. Such an order may be passed even ex-parte, that is, in the absence of the opposite party. In any case, the dismissal would remain a dismissal by a non-speaking order where no reasons have been assigned and no law has been declared by the Supreme Court. The dismissal is not of the appeal but of the special leave petition. Even if the merits have been gone into, they are the merits of the special leave petition only. In our opinion neither doctrine of merger nor Article 141 of the Constitution is attracted to such an order. Grounds entitling exercise of review jurisdiction conferred by Order 47 Rule 1 of the C.P.C. or any other statutory provision or allowing review of an order passed in exercise of writ or supervisory jurisdiction of the High Court (where also the principles underlying or emerging from Order 47 Rule 1 of the C.P.C. act as guidelines) are not necessarily the same on which this court

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exercises discretion to grant or not to grant special leave to appeal while disposing of a petition for the purpose. Mere rejection of special leave petition does not take away the jurisdiction of the court, tribunal or forum whose order forms the subject matter of petition for special leave to review its own order if grounds for exercise of review jurisdiction are shown to exist. Where the order rejecting an SLP is a speaking order, that is, where reasons have been assigned by this Court for rejecting the petition for special leave and are stated in the order still the order remains the one rejecting prayer for the grant of leave to appeal. The petitioner has been turned away at the threshold without having been allowed to enter in the appellate jurisdiction of this Court. Here also the doctrine of merger would not apply. But the law stated or declared by this Court in its order shall attract applicability of Article 141 of the Constitution. The reasons assigned by this Court in its order expressing its adjudication (expressly or by necessary implication) on point of fact or law shall take away the jurisdiction of any other court, tribunal or authority to express any opinion in conflict with or in departure from the view taken by this Court because permitting to do so would be subversive of judicial discipline and an affront to the order of this Court. However this would be so not by reference to the doctrine of merger.

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Once a special leave petition has been granted, the doors for the exercise of appellate jurisdiction of this Court have been let open. The order impugned before the Supreme Court becomes an order appealed against. Any order passed thereafter would be an appellate order and would attract the applicability of doctrine of merger. It would not make a difference whether the order is one of reversal or of modification or of dismissal affirming the order appealed against. It would also not make any difference if the order is a speaking or non- speaking one. Whenever this Court has felt inclined to apply its mind to the merits of the order

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put in issue before it though it may be inclined to affirm the same, it is customary with this Court to grant leave to appeal and thereafter dismiss the appeal itself (and not merely the petition for special leave) though at times the orders granting leave to appeal and dismissing the appeal are contained in the same order and at times the orders are quite brief. Nevertheless, the order shows the exercise of appellate jurisdiction and therein the merits of the order impugned having been subjected to judicial scrutiny of this Court.

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“To merge” means to sink or disappear in something else; to become absorbed or extinguished; to be combined or be swallowed up. Merger in law is defined as the absorption of a thing of lesser importance by a greater, whereby the lesser ceases to exist, but the greater is not increased; an absorption or swallowing up so as to involve a loss of identity and individuality. (See Corpus Juris Secundum, Vol. LVII, pp. 1067-1068)

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We may look at the issue from another angle. The Supreme Court cannot and does not reverse or modify the decree or order appealed against while deciding a petition for special leave to appeal. What is impugned before the Supreme Court can be reversed or modified only after granting leave to appeal and then assuming appellate jurisdiction over it. If the order impugned before the Supreme Court cannot be reversed or modified at the SLP stage obviously that order cannot also be affirmed at the SLP stage.”

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The Hon'ble Supreme Court in Custodian of Evacuee Properties

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v. Amjadali Gazanfarali Bukhari and Others reported in (2014) 16 SCC 92, had occasion to consider a similar question and, at paragraphs 6 to 11, held as under:

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“6. Looking at the peculiar facts of the case, we do feel that an effort had been made to revive or rehear the special civil application, which had already been finally disposed of by filing Miscellaneous Civil Applications No.2706 of 2006. Prayer in the said miscellaneous application was that status quo should be maintained till the State of Gujarat takes final decision in pursuance of the final order passed in Special Civil Application No. 15239 of 2006. The High Court had exceeded its jurisdiction by virtually giving a second hearing in a petition which had been disposed of earlier merely because Miscellaneous Civil Application No. 2706 of 2006 had been filed only for some interlocutory orders and the application had also become infructuous because even the final direction given in the main petition had been complied with.

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In our opinion, the present case is nothing but an abuse of process of law. The matter has been made bulky by placing several orders and records which are really not relevant.

¶172

In pursuance of the final direction, the Government of Gujarat had issued a Memorandum dated 21-12-2006, whereby the Government of Gujarat had passed a detailed speaking order narrating all relevant facts and had come to the final conclusion that the entire matter had become infructuous and nothing further was required to be done. The memorandum referred to hereinabove has attained finality as it appears that none has challenged the same so far.

¶173

At the time when the said Miscellaneous Civil Application No.2706 of 2006 was heard, the State of Gujarat had already passed a final order under Memorandum dated 21-122006 and therefore, the said miscellaneous application had already become infructuous. In spite of the said fact, without taking into account a well-reasoned order, the High Court went on to pass the impugned order dated 1-11-2007.

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The High Court of Gujarat had virtually reopened the case and taken a decision without taking into account the facts duly recorded in the Memorandum issued by the Government on 21-12-2006. It is very strange as to how after disposal of the case, in a miscellaneous application, which had been filed only for the purpose of maintenance of status quo during the pendency of some proceedings, the Court heard the matter again and that too when the said miscellaneous application had become infructuous.

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In our opinion, final decision had already been taken by the State of Gujarat in pursuance of the direction given by the High Court of Gujarat in Nirav Vinodchand Shah v. Custodian of Evacuee Properties [Special Civil Application No.15239 of 2006, decided on 26-9-2006 (Guj)] on 21-12-2006 and therefore, nothing further was required to be done by the High Court. We are, therefore, of the view that Miscellaneous Civil Application No.2706 of 2006 and subsequent civil applications filed in Special Civil Application No.15239 of 2009 should not have been entertained by the High Court after the Government of Gujarat had issued Memorandum dated 21-12-2006.”

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Going through the factual circumstances discussed above, it is categoric and clear that the writ appeal was disposed of by this Court taking into account the contention put-forth by the respective parties and affirming the judgment of the learned single Judge in all respects. Therefore, the issue raised by the parties have become final. Learned single Judge had, in fact, reopened the judgment in W.P.(C) No.28355 of 2015 and passed the impugned order, interfering with the finality attained in the judgment in writ appeal specified above. In that view of the matter and taking in account the

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principles of law laid down by the Hon'ble Apex Court, the order dated 06.01.2007 passed in I.A. No.19644 of 2016 in W.P.(C) No.28355 of 2015 is bad in law, since the I.A. was hit by the principles of res judicata. The order in the I.A. has virtually modified the judgment, which was not permissible under law. The petitioners in the I.A did not have a case that there was any error apparent on the face of record, enabling the learned single Judge to exercise the power of review. Moreover, the issues raised by the petitioners were disputed by the bank and there were no sufficient materials before the bank in order to sort out the factual disputes.Therefore, we are of the definite view that the learned single Judge failed to take note of the said aspects and, therefore, the impugned order cannot be sustained under law.

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In the light of the discussions and findings above, we are of the view that appellant bank is entitled to succeed in appeal. Writ appeal is allowed and the impugned order is set aside.

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Sd/-

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S.MANIKUMAR CHIEF JUSTICE

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Sd/SHAJI P.CHALY JUDGE

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Krj

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//true copy//

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P.A. TO CJ

The State Bank of Travancore v. Jose Paul

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The State Bank of Travancore v. Jose Paul

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