High Court appellate court dismissed an appeal challenging a single judge decision that refused to exercise discretion under Article 226 to interfere with bank recovery proceedings under the SARFAESI Act.
Impugned judgment set aside but writ appeal dismissed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR
&
THE HONOURABLE MR. JUSTICE SHAJI P.CHALY
WEDNESDAY, THE 11TH DAY OF MARCH 2020 / 21ST PHALGUNA, 1941
WA.No.503 OF 2020
[AGAINST THE JUDGMENT DATED 28.01.2020 IN WP(C) NO.919/2020(L)]
APPELLANT/PETITIONER:
STEPHEN BERNARD, AGED 70 YEARS PROPRIETOR, M/S.STEPHEN BERNARD CONSTRUCTION COMPANY, ROBIN DALE, PADINJARE KADAVIL, VELLIMON P.O., KOLLAM DISTRICT - 691 511.
BY ADVS.SRI.LIJU V. STEPHEN SMT.INDU SUSAN JACOB SRI.VINAY M.E.
RESPONDENTS/RESPONDENTS:
1 STATE BANK OF INDIA, KUNDARA MAIN BRANCH, REPRESENTED BY ITS CHIEF MANAGER, DILEEP KUMAR, S/O.SREEDHARAN NAIR, CHIEF MANAGER, KUNDARA BRANCH, KOLLAM - 691 501.
2 THE AUTHORIZED OFFICER, STATE BANK OF INDIA, STRESSED ASSETS RECOVERY BRANCH, LMS COMPOUND, NEAR MUSEUM WEST GATE, VIKAS BHAVAN P.O., THIRUVANANTHAPURAM - 695 033.
BY ADV. SRI. JAWAHAR JOSE, SC
THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 11.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
W.A. No.503/2020
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JUDGMENT
Dated this the 11th day of March, 2020
S.Manikumar, CJ
Instant writ appeal is filed by the writ petitioner against judgment dated 28.01.2020 in W.P.(C) No.919 of 2020. It is evident from Exhibit-P15 notice for sale of immovable properties dated 23.12.2019 and other proceedings issued by State Bank of India, respondents in appeal, against the petitioner, the subject issue relates to action initiated by the bank under the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, SARFAESI Act).
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Crores was claimed by the bank as per the proceedings under the SARFAESI Act, 2002. Anyhow, writ court, taking into consideration the factual circumstances of the case, has clearly found that the bank has pointed out how the amount was calculated against the loan account of the appellant and there was no document produced by the appellant to controvert the factual circumstances putforth by the bank. The writ court held that there was no enabling circumstances to interfere with the action initiated by the bank against the appellant, in view of the uncontroverted statement of facts submitted by the bank.
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“15. It is the solemn duty of the Court to apply the correct law without waiting for an objection to be raised by a party, especially when the law stands well settled. Any departure, if permissible, has to be for reasons discussed, of the case falling under a defined exception, duly discussed after noticing the relevant law. In financial matters grant of ex - parte interim orders can have a deleterious effect and it is not sufficient to say that the aggrieved has the remedy to move for vacating the interim order. Loans by financial institutions are granted from public money generated at the tax payers expense. Such loan does not become the property of the person taking the loan, but retains its character of public money given in a fiduciary capacity as entrustment by the public. Timely repayment also ensures liquidity to facilitate loan to another in need, by circulation of the money and cannot be permitted to be blocked by frivolous litigation by those who can afford the luxury of the same. The caution required, as expressed in Union Bank of India v. Satyawati Tondon [(2010) 8 SCC 110] , has also not been kept in mind before passing the impugned interim order:
"46. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes, cess, fees, etc. seriously impedes execution of projects of public importance and disables them from discharging their constitutional and legal obligations towards the citizens. In cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions, which (sic will) ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Of course, if the petitioner is able to show that its
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case falls within any of the exceptions carved out in Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad (AIR 1969 SC 556), Whirlpool Corpn. v. Registrar of Trade Marks [(1998) 8 SCC 1, and Harbanslal Sahnia v. Indian Oil Corpn. Ltd. [(2003) 2 SCC 107, and some other judgments, then the High Court may, after considering all the relevant parameters and public interest, pass an appropriate interim order."
"32. When a position, in law, is well settled as a result of judicial pronouncement of this Court, it would amount to judicial impropriety to say the least, for the subordinate Courts including the High Courts to ignore the settled decisions and then to pass a judicial order which is clearly contrary to the settled legal position. Such judicial adventurism cannot be permitted and we strongly deprecate the tendency of the subordinate Courts in not applying the settled principles and in passing whimsical orders which necessarily has the effect of granting wrongful and
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unwarranted relief to one of the parties. It is time that this tendency stops."
In the light of the above discussion and decision, we are of the considered opinion that the appellant has not made out a case justifying interference with the impugned judgment, in appeal under Section 5 of the Kerala High Court Act. Writ appeal fails and accordingly, it is dismissed. No costs. However, we make it clear that if the appellant is entitled to get any benefit of moratorium declared by the Governments, banking institutions or Reserve Bank of India, this judgment will not stand in their way, in granting such time, in accordance with the orders. so passed.
SD/-
S.MANIKUMAR CHIEF JUSTICE
SD/SHAJI P.CHALY JUDGE
krj
2 issues framed by the court
Whether this Court can interfere with the judgment of the single judge dismissing the writ petition against proceedings under the SARFAESI Act.
Whether the High Court committed judicial impropriety by granting stay in banking recovery matters contrary to settled Supreme Court decisions.
Colour shows how this judgement treated each authority
Authorized Officer, State Bank of Travancore and Another v. Mathew K.C.Applied¶32
(2018) 3 SCC 85 · Who else cites this
Union Bank of India v. Satyawati TondonApplied¶35
[(2010) 8 SCC 110] · Who else cites this
Baburam Prakash Chandra Maheshwari v. Antarim Zila ParishadReferred¶36
(AIR 1969 SC 556) · Who else cites this
Whirlpool Corpn. v. Registrar of Trade MarksReferred¶36
[(1998) 8 SCC 1] · Who else cites this
Harbanslal Sahnia v. Indian Oil Corpn. Ltd.Referred¶36
[(2003) 2 SCC 107] · Who else cites this
Dwarikesh Sugar Industries Ltd. v. Prem Heavy Engineering Works (P) Ltd. and AnotherApplied¶41
[(1997) 6 SCC 450] · Who else cites this
2 provisions across 2 enactments
STEPHEN BERNARD
STATE BANK OF INDIA, KUNDARA MAIN BRANCH
THE AUTHORIZED OFFICER, STATE BANK OF INDIA, STRESSED ASSETS RECOVERY BRANCH
S.MANIKUMAR
SHAJI P.CHALY
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
