Allowed

Mathew Joseph v. the South Indian Bank Ltd.

Kerala HC18 Sept 2020WP(C)/11484/2020

Case brief

AI extract

What is this about?

This Writ Petition challenged a bank's demand for auction payment. The Court upheld a mediation agreement extending the payment deadline, citing precedent and pandemic-induced economic hardship, and recorded the settlement as lawful.

What did the court decide?

The Writ Petition is allowed recording the memorandum of mediation agreement dated 13.07.2020; parties to abide by its terms.

Mathew Joseph Vs the South Indian Bank Ltd. — Banking and Recovery | Kerala HC (2020)

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IN THE EIGE COI'RT OF KERAIA AT ERNAICT'I,AIT{

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PRESEIiIIT

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TEE EONOT'RABLE MR. 'I'STICE C . S . DIAS

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FR'IDAY' TEE 18TH DAY OF SEPTEMBER 2020 / 27TE BEADRA' L942

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WP^(C) .No.11484 OF 2020 (Il

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PETITIONER:

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}'ATEEW dTOSEPE AGED 45 YE.ARS

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S/O. MATEAT CHOORAI(KATTU i'OSEPE, CEOORAICKATTU EOUSE, NEAR POST OFFICE, KU!'IARiAI{ELLOOR P.O., KOTTAYAIT{.

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BY ADV. SRT .NAI{DA@PAL S . KT'RUP

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RESPONDENT:

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THE SOUTH TNDIAI{ BAI{K I.TD. REGTONAL OFFTCE, FrRST FLOOR, REGENCY SQUARE, COIJLECTORATE P.O., KOTTAYAM, REPRESEIiITED BY ITS AIITEORISED OFFICER-585 OO1 .

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Rl BY ADV. SRI . K. K. ..TOEN

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R1 BY ADV. SRT.ASISE K.J'OEN

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TEIS !{RItr PETITION (CMr) EAVTNG COME Up FOR ADMISSION ON 18.09.2020, THE COT'RT ON THE SAME DAY DELIVERED TEE FOLLO$TING:

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WP (C) .No.IL484 OF 2020 (I)

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IUDGMENT

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Dated this the LBth day of September 2O2O

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This Writ Petition is filed, inter alia, seeking to quash Exhibit P9 order issued by the respondentBank.

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It is the case of the petitioner in the writ petition that, he had participated in Ext.PL tender cum auction conducted by the respondent, for the sale of a secured asset. The reserve price was fixed at Rs.1,40,00,000/-. The petitioner had submitted Ext.P2 bid for Rs.l-,40,02,0001-. Being the sole bidder, the auction was finalized in his favour as per Exhibit P3.

¶20

Pursuant to Exhibit P3, the petitioner deposited an amount of Rs.35 ,O2,OO0|-, being 25o/o of the bid amount, os evidenced by Exhibit P4. The petitioner was to remit the balance amount of Rs.1-,05,00,000/- within a period of L5 days i.e., on or before 26.03.2020.

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3 WP(C) .No.11484 OF 2020(I)

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At this juncture, the Country was hit by the COVID-1-9 pandemic. Consequently, the Government declared the National lock down, which badly affected the petitioner's business. Hence, the petitioner was disabled from keeping up to his obligation under Ext.P3. In the said circumstances, the petitioner had prefemed Exhibits P5 and P6, representations before the respondent, seeking enlargement of time to pay the balance amount. The respondent by Exhibit P7 letter dated 06.06.2020 extended the time period till L0.06.2020, but made it clear that if the petitioner failed to remit the balance amount within the time period, the amount already deposited would be forfeited. Again the petitioner preferred Ext.PB representation, which was rejected by Ext.P9, reiterating the respondent's stand in Ext.P7. It is aggrieved by the stand taken of the respondent in Exhibit P9, that this Writ Petition is filed.

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The respondent has filed a counter affidavit,

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WP(C) .No.11484 OF 2020(I)

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inter alia, contenting that the maximum time period that could be granted to the petitioner as per Rule I (4) and (5) of the Security Interest (Enforcement) Rules, 2002, is 3 months from the date of confirmation of sale, which would have ended on 1-0.06.2020. It is in the said circumstances, that the respondent issued Exhibit Pg letter.

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On 22.06.2020, when the case was taken up for consideration, this court felt that there was an element of settlement of the dispute between the parties through mediation. Consequently, this court by its order dated 22.06.2020 referred the parties to mediation, on condition that the petitioner remits a further amount of Rs.10,00,000/- (Rupees ten laks only). The petitioner remitted the said amount and the parties appeared before the District Mediation Centre, Kottayam.

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In the mediation proceedings, the parties arrived at a consensus and a memorandum of agreement was executed by them on 13.O7.2020. The

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WP(C) .No.11484 OF 2020(I) s

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petitioner has undertaken to pay the balance amount due to the bank on or before 30.1 I.202O. The memorandum of agreement has been forwarded to this court.

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B. This Court in Mehar Renolds V Josemon Simon and another 12OL9(4)KLT 693: RP No.754 of 2019 in WP(C) No.15466 of 2018l has categorically laid down the law that when an auction purchaser and a secured creditor enter into an agreement, extending the time period for payment of the balance consideration, the same does not infract the mandate under Rule I (4) of the Rules. AIso, the borrower has no locus standi to interfere in such extension granted.

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Furbher more, considering the adverse economic condition in the country due to COVID-19 pandemic and that the Reserve Bank of India has declared a moratorium on financial transactions, I am of the considered opinion that leniency has to be shown in favour of the petitioner by giving him some

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WP (C) . No .II4B4 OF 2020 (I)

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breathing time to pay the balance consideration. In light of the law laid down in Mehar Re5molds (Supra) and in light of the above findings, and also in exercise of the discretionary powers of this Court as enshrined under Article 226 of the constitution of India, I hold that the memorandum of mediation agreement entered into between the petitioner and respondent is lawful and duly executed.

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In the result, this Writ Petition is allowed recording the memorandum of mediation agreement dated L3.7.2A20. The parties shall abide by the terms of the mediation agreement, which shall form a part of this judgment.

sd/_

C.S.DIAS JUDGE

ska

WP(C) .No.11484 oF 2020(r)

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APPEIIDIX

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PETITIONER' S,/S EXHIBTTS :

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EXHIBIT Pl TRUE COPY OF TEE TEIIDER CT'M AUCTION SALE NOTICE DATED 20.2.2010 PT'BLISEED BY TEE RESPO!{DENT. E:IHIBIT P2 TRI'E COPY OF TEE TEIIDER FORM SI'BD{ITTED BY TEE PETITIONER BEFORE THE RESPOIIDENT ON 11.3 .2020 .

¶44

EXHIBITP3	TRT'ECOPYOF TEELETTER DATED11.3 .2020 rSSI'EDBYTEERESPOIIDENTDECI.ARINGTEE PETTTTONERASTEESUCCESSEI'I, BIDDER.
EXFIBITP4	TRI'ECOPYOFTHE RECEIPT EI/IDENCINGTEE
	pAyMElrroFRs.35,02 ,O00/-DATEDL2.3 .2020.

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|EXHIBITP5|TRI'ECOPYOF THELETTER DATED24.3.2O2O
ST'BMITTEDBYTHE PETITIONERBEFORETHE
RESPOI{DEIi|ITSEEKINGENI.ARGEDdENTOF TIME.| |---|---| |E:GIBITP5|TRT'ECOPYOF THEREPRESENTATIONDATED
7.5.2O2OST'BD{ITTEDBYTHEPETTTTONERBEFORE
THERESPOIIDEIiIT.| |EXEIBITP7|TRI'ECOPYOF THELETTERDATED14.5.2O2O
TSSUEDBYTHERESPOITDENTTO TEEPETITIONER.| |EXHTBTTP8|TRI'ECOPYOF THELETTERDATED22.5.2020
SI'B!,IITTEDBY TEEPETTTTONER BEFORETHE
RESPONDET{T.| |EXEIBITP9|TRT'ECOPY OE'TEELETTER DATED6.6.2O2O
rSSI'EDBYTBERESPOIIDENTTO TEEPETITIONER.|

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0043824

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District^{Mediation Centre'Kottayam} Dated:^l5'07-&o&o

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558 noqCI'

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Fnom,

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The Co-ordinator^{(Sub Judge)} District^{Mediation Centre'}

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KottaYam.

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To, rhe R"3io4rrc.rr^(JudJoa!) Ho,.jbbFri6bC.c,urlg||cezalo &^{rmt..^to^n',}

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Sir,

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Sub:DistrictMediationcentre.Reportfi|edhyMediator.forwardingof.Reg'

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I am forwarding^{herewiththe report fired by Mediatorin...c;J.p.c...'n{'o""ij"+'t"+ la"}

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.--......of that^{court for favour of necessary action'}

Yours^FaithfullY'

. DISTRICT MEDIATION CENTRE, KOTTAYAM

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MEMORANDUM OF AGREEMENT UNDER SECTION 89 OF THE CODE OF THE CIVIL PROCEDURE READ WITH RULES 24 OF THE CIVIL PROCEDURE (ALTERNATTVE D|SPUTE RESOLUTTON) RULES, 2008

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The parties above named beg to submit as follows:

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The aforesaid SuiVs Petition/s, Appeal/s, Complaint were referred to mediation for resolving the dispute between the parties. In the course of mediation, they have resolved their dispute and have agreed to the following terms and conditions:

¶67

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fd*f,tranot

¶69

In view of the aforesaid agreement entered into between the parties, the parties^pray that the SuiV s, Petition/s, Appeal/s be deqreed/dpmiS3ed/disposed of, in terms of the aforesaid agreement.

¶70

In view of the aforesaid agreement, the Plaintiff/s, AppellanVs^prayis for refund of the full institution Fee.

¶71

Parties will appear on....,................'-.... .........before the Hon'ble Courtfuf pnpftW Orders/
Decree in terms of the above said agreement. 1 tli,r^ z'l
-l),uV'- n-i,W^
@n
praintiff/s, petitioner/s M" Mofhrrov? o+.pk o
Defendanvs Zff *f", lt^
Appe lt lanVs, App lt icanVs ,€ hlr aara ka ft t" tl fuge ouse Responden Vs t/s /" Cld/ oot, f+f n+f *Z-Z J"^
complainant Aln^n %st ffi|u Accused. &olt"e(?"h "? u,
t<o+-d!,,'".
ko^#uno! io
Ka/lz'^s-"''
Advocate for Plaintiff/s. Advocate for Defendants
U
Petitioner/s, Appellents RespondenVs
Accused
ApplicanVs, Complainant

¶72

VERIFICATION

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We the^parties above named, do^{hereby solemnly state and declare that what is containedin} ............are true to the best to the best the best of our our^{knowledge, informa-} paragraphs I to........r{ tion and belief.

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............are true to the best to the best the best of our our^{knowledge, informa-}

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l4^1*N vqDL

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Place ,lC- Ll a-T-* I Date: tJ ty,2_D

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Plaintiff/s, Petitioner/s Appellants, Complainant Ak* P^Jot P.L-"' A;i,"il- ffiu^ DefendanVs, RespondenVs Accused.

Mathew Joseph v. the South Indian Bank Ltd.

Case brief

What is this about?

What did the court decide?

Mathew Joseph v. the South Indian Bank Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

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